STOCK DIVIDENDS 19

Had capital-stock split ups been substituted to even a comparatively
limited extent for stock dividends from 1920 to 1926 each shareholder
might have possessed as many shares as he held at the end of that
period, but each share would have been somewhat better protected,
in so far as surplus serves as a protection to shareholders.
The foregoing statements should not be taken as favoring the
creation of an excessive surplus, or of its indiscriminate investment.
Even though it is necessary or desirable for one reason or another to
pursue a policy of building up a large surplus from earnings and
reinvesting it in the business, it does not follow that it is either
necessary or desirable to capitalize that surplus to the extent prevailing
 in the last few years.