14

GC

STOCK DIVIDENDS

a

I'aBLE 10.— Disposition of approximate tolal surplus attributable to the periods seven
years prior and subsequent to the date of closing nearest January 1, 1920, for 566
corporations vaying stock dividends

FIRST 7-YEAR PERIOD

[tem

Burplus as of date of closing nearest Jan. 1, 1920. __..._____.
Surplus as of date of closing nearest Jan. 1, 1913.

Net increase in undistributed surplus...
Cash dividends, 1913-1919... ________.
8tock dividends, 1913-1919... ____.
Other dividends, 1913-1919. _ oom.

Total surplus available for distribution attributable to period. ...._....

Amount

Per cent
of total
Sains
available
for distribution


$2, 153, 385, 407
R12 032 K11

44,37
42.38
11.21
2.04
3, 020,663,501 | 100.00

SECOND 7-YEAR PERIOD

[tem

THAR REL EE B
ha ade er
he airbie ry
Re

Surplus as of date of closing nearest Jan. 1, 1927... ....___
Surplus as of date of closing nearest Jan. 1, 1920 _. §

Net increase in undistributed surplus. _
Cash dividends, 1920-1926______._.____
Stock dividends, 1920-1926__._
Other dividends, 1920-1924

Total surplus available for distribution attributable to period. ..__._____

Amount

$2, 518, 750, 74€
92 153. ARE ANT

365, 365, 339
2, 195, 864, 505
1, 555, 336, 194
8. 802. 055

4, 125, 368, 003

Per cent
of total
surplus
available
for distribution


8. 86
53.23
37.70
121
100. 00

After fully considering the foregoing computations, the conclusion
that there has been an enormous increase in stock dividends since the
decision in Eisner ». Macomber seems inevitable.
CONCLUSIONS

£4, significant changes in corporation dividend policy since 1920
are that—
(1) Corporations have apparently distributed in the seven years,
1920 to 1926, much larger proportions of both total distributable
surplus and total surplus attributable to the period than in the seven
years, 1913 to 1919.
(2) This increase in distribution has been chiefly by way of both
absolute and relative increases in stock dividends in the later period
as compared with the earlier. While there were considerable absolute
increases in cash dividends in the second period, there was practically
no relative increase.
In part, these differences are due to the abnormal character of
business and financial conditions resulting from the World War Tin
part, they are the results of the tax policies of the Federal Government.

With the outbreak of the war in 1914 the belligerents began the
purchase in the United States of enormous quantities of foodstufls