Milbank's Dividend

Some seven years ago Jeremiah Milbank, Manhattan banker, paid a call at the office of J. P. Morgan & Co., asked to "see the man who handled Southern Railway Co.'s affairs.'' Shown into the office of Thomas Cochran. Banker Milbank found John Pierpont Morgan also there. The three tycoons chatted, Mr. Milbank finally said he would like to see Southern pay some dividend on its common stock. The Morgan men explained that Southern's intrenchment policy put dividends out of the question.

"But Mr. Morgan you don't under-stand," said Banker Milbank. "I own the Southern and I want some common dividends."

His hosts sprang to their feet.

"How much Southern stock have you?" they shouted.

"About 500,000 shares," was the reply.

"Then you shall have some common dividends."

Last week this payment, started in 1924, and the preferred payment in force since 1922, were omitted. Some opinion held the road should not have begun dividends so soon, should not have paid so much ($8 in 1928-30). Others recalled that in 1926, with its common paying $7, Southern was able to offer rights to stockholders, raised $10.000,000 additional capital. Unusual provision of Southern's charter is that the company cannot pay out more in dividends in any one year than it has earned in the previous year.

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