Why the Standard Pays Large Dividends

Random Reminiscences of Men and Events, by John D. Rockefeller is part of the HackerNoon Books Series. You can jump to any chapter in this book here. Chapter IV : WHY THE STANDARD PAYS LARGE DIVIDENDS

Chapter IV. WHY THE STANDARD PAYS LARGE DIVIDENDS

Let me explain what many people, perhaps, fully appreciate, but some, I am sure, do not. The Standard pays four dividends a year: the first in March, which is the result of the busiest season of the whole twelvemonth, because more oil is consumed in winter than at other seasons, and three other dividends later, at about evenly divided periods. Now, these dividends run up to 40 per cent. on the capital stock of $100,000,000, but that does not mean that the profit is 40 per cent. on the capital invested.

As a matter of fact, it represents the results of the savings and surplus gained through all the thirty-five or forty years of the workings of the companies. The capital stock could be raised several hundred per cent. without a penny of over-capitalization or "water"; the actual value is there. If this increase had been made, the rate would represent a moderate dividend-paying power of about 6 to 8 per cent.

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This book is part of the public domain. John D. Rockefeller. (2005). Random Reminiscences of Men and Events. Urbana, Illinois: Project Gutenberg. Retrieved September 2022 from https://www.gutenberg.org/files/17090/17090-h/17090-h.htm

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