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Show Western Union Scrip Dividends. New Yobk, March 11. The regular quarterly quar-terly statement of the Western Union Telegraph Tele-graph Company shows a surplus January 1st, 1886, of $4,102,179.84. The net revenues of the quarter ending March 31st, based upon nearly completed returns for January and partial returns for February, and estimating March, will be about $1,050,000. Adding the surplus as above, makes a total of $5,152,-179.84, $5,152,-179.84, from which appropriations for interest inter-est on the bonded debt of $123,500, and for the Binking fund of $19,991, leaves a balance of $5,008,688.84. The FALLING OFF OF THE NET BEVENUES For the last quarter was in the cable, commercial, com-mercial, news and quotation service. There was a large increase of expenses for taxes, and cable and land line repairs, which are beyond control. The receipts for regular inland commercial messages nave been well maintained, the winter being a very hard one on the telegraph lines, occasioning unusual un-usual expense for maintenance, and many protracted interruptions of the wires for handling business. Notwithstanding such frequent interruptions, the volume of inland commercial messages handled is greatly in excess of tbe previous year. Of the surplus at the close of this quarter, $5,008,688.84, as shown in the statement, there have been invested in-vested in CONSTBUCTION AND PUBCHASE OF LINES And other telegraph properties up to the beginning of the quarter, $4,3882986.12, with a probability of requiring other investments of considerable sums at an early date. It is, therefore, recommended to pay no cash dividends, but the surplus invested in . the plant maybe capitalized bv the issue of additional capital stook, and distributed pro rata to the stockholders, to whom it belongs, which will be held by the Court of Appeals to be a legal and proper method of representing repre-senting it. John T. Lewy, a director of the company, says: "The only increase in the capital stock will be to the amount of the dividends, viz: $1,200,000." Nothing was said about issuing bonds to-day. The Post, in its financial article, says: About 12 o'clock the Western Union Directors announced a scrip dividend of 1)4 percent, for the quarter. The revenue for the" quarter quar-ter ending March 31st shows a decrease of $300,000; net revenue for the quarter to March is estimated at $906,509, or equal to 1 percent., or $80,000,000 of stock, but as the estimate of the net revenue for the quarter quar-ter to December 31st was $32,400 in excess, it was not improbable that the present figures fig-ures may also be an over-estimate, though even at the present figures it appears that it has NOT EABNED ITS LAST TWO DIVIDENDS By about $440,000, and it becomes a pertinent per-tinent question as to whether the previous dividends have not been paid partly out of the surplus fund. Western Union dividends have been regarded with suspicion for several sev-eral years, but more especially since the reduction re-duction to 6 per cent, in September, 1884. Evidence of this suspicion has been in the fact that while other dividend-paying stocks have been selling on a basis of from 5 to 5Js per cent, on investment in them at average market prices, Western Union has constantly con-stantly sold at prices which 6 per cent, dividends divi-dends on the par have yielded, about 9 per cent, oil the investment. It is apparent that with money loaning at 1)4 to 2 per cent, per annum on call, and 3 to 4 per cent, on investment in-vestment loans, a stock that would pay 9 per cent. Would not be allowed to remain at that price unless there was some deep-rooted suspicion that its dividends would SUDDENLY COME TO A STOP. It appears that thi3 time has arrived,&hen it comes to a debate among the directors as to whether they shall pass a dividend or issue scrip to keep up the fiction, the end now at hand. As to the cause of this un profitable result, it is believed by some persons per-sons whose practical knowledge of the operation oper-ation entitles their judgment to some consideration, con-sideration, that the reduction of telegraph rates in the last seven or eight years has placed the business on a basis where there is no profit in it. The effects of weather and storms are that wires rust, poles are blown down, and the net result is that the greater part of the entire plant has to be renewed every five years. It is also Believed that in November GOULD SOLD OUT s The larger part of his holdings of Western Union, and, contrary to common opinion, lost control of the property, for the time being. be-ing. If any one else had chosen to buy the control they could easily have done so. It is also believed that by proxies, as well as his own holdings, he has control of it now, because be-cause nobody else wants it. The stock has been widely distributed to small holders, to whom the high rate of return has been very attractive, and if these charges in regard to the condition of the property and construction construc-tion account are not true, the directors owe its numerous stockholders an explanation. |
