Evening star., 1937-01-31
Holders Income Expected
to Show Wider FIuctua-
ti0ns in Future.
.DU POINT TAKES.L
IN ENDING OLD BASIS
Regular Schedule Is Displaced
by Payments Based Entirely
on Current Earnings.
BY FREDERICK GARDNER,
Associated Press financial Writer.

hSSOCldtGu EICoS "AsSAs
NEW YORK, January 30.-Share-
holders in American corporations face
prospects of more rapidly f1uctuating
income as the result Of a tendency to
shift from a fixed quarterly to a more
flexible dividend policy.
The recent move by E. I. du Pont
de Nemours & Co. away from the
traditional American corporate policy
Of paying regular" common stock
dividends, is regarded widely in Wall
street as q forerunner Of similar
changes by other top-rank companies.
Starting next March, the Du Pont
Co., in place of the conventional "regu-
lar" payment, will distribute individual
or interim" dividends each quarter.
depending on earnings for the period
and prevailing conditions.
May Cover Wide Range.
Thus, dividends, like seasonally
fiuctuating corporate earnings, may
range from feast to famine" in
given year.
The policy of making interim pay
ments and q "fina" disbursement
when annual earnings have been de-
termined has been followed by many
British and other foreign companies.
The Ohio Valley disaster and indus
trial strife, in SO far as they influence
corporate earnings temporarily, are
expected to hasten shift to the British
practice.
The sharpest spur to change, how
ever, is the Federal surtax on undi-
vided profits. Passed in the last ses-
sion of Congress, 1t helped produce to-
ward the end of last year a spectacu-
lar downpour of increased, extra and
Special dividends, with wholesale
abandonment of regular" rates.
No Announcement Made.
While designating payments as "spe-
cial" or EXTRA" most companies made
no formal announcement Of change in
policy. Wall Street observers assumed
directors preferred to await clearer
insight into chances Of revision Of the
profits levy before scuttling a regular
dividend" policy. Lately hopes for
drastic alteration in the law have
waned.
General Motors, dominated by Du
Pont interests and with operations
partly disrupted in the c. I. o. struggle
to unionize automotive workers, has
been mentioned as a likely convert to
interim" and final" dividends.
For countless thousands who buy
and sell stocks, the shift complicates
matters. The prospective share buyer,
under an interim policy, no longer can
glance at quotation lists for the
regular" dividend rate as a guide to
figuring yields and investment values.
He will have to be content with the
last payment and a study Of earning
trends.
Earnings to Be Guide.
Nor can he gamble on chance OF
relatively stable returns during bad
times, analysts say. He will have to
adjust his judgment to the ebb and
now Of earnings over shorter periods.
The major symbol Of a regular"
dividend policy in Wall Street has been
American Telephone & Telegraph Co.
It has maintained a 50 annual rate
since 1922, dipping into savings of
good years to sustain the rate through
the depression.
Other companies similarly were able
to keep up a relatively stable flow Of
dividends out Of the surplus of fat
years.
An army Of shareholders, with hold
ings ranging from a few shares to
large blocks, would find its regular
income affected by a shift to flexible
dividends. Du Pont, for instance, has
about $4,000 shareholders, General
Motors about $4,000 and American
Telephone around Gas, 900.