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and spruces, so abundant and thickset that in their rank, green opulence they seem nearer the hothouse tropics than the Arctic Circle. The air teems with insect life, and one half expects to find the corrugated snouts of alligators breaking the oily surface like waterlogged driftwood here and there. Only the lily-pads are lacking to complete the picture of a sluggish stream of the Temperate or even the Torrid Zone. The people of the settlement forbear to drink the rusty water. They repair instead to the lake into which it so deliberately empties. The lake is green and clean, with a tang of the saline and the marine, and emerging from the river to its sailless broad expanse is like going from a moldy cellar to the windy freedom of a housetop. But the strange thing is that the very water which has so recently been furiously raging like the heathen of the psalm is now so placid. The falls, fairly comparable in form and beauty with Niagara, and the boisterous rapids below them have created a vehement turbulence of which nothing appears a short distance farther on. The fury was spent in sound and commotion, like the white heat of anger of a "husky" dog. The water of life has become the water of death-a Lethe or a Styx.

No wonder the mortal term of man is compared with the course of a river. The parallel is obvious. Mere force and violence at the beginning may offer an imposing spectacle, but when the driving energy gives out and the seething current of abounding vitality conforms to the channel of routine and acquiesces in low levels, forgetful of high origins, man's life is no more a quickening force, a motive power, a servant of God like sunlight or fire, wind or frost. Salvation, for man or river, is in maintenance of motion. For a man the motion may be that of intellectual processes as well as physical. He need not brandish his arms to appear to be doing something. But his mind, at least, must work. This is what Thoreau means, when he says, "A man sits as many risks as he runs." The danger to a solitary dweller in the North is that, with so much time on his hands and boundless space about him, he will not save his mind by means of the strenuous exertion it requires. He need not fear so much for the upkeep of his body. It has much to do to assure its warmth and nourishment. He will have the physical exercise of cutting wood, or minding trap lines, or fishing through the ice. The danger is that the soul may "dwindle, peak, and pine" for sustenance in the barren snowbound lands; that it will hibernate and sit in darkness the long night through; that the sun of summer will not dissipate the chill and rouse the soul from its enduring torpor.

The mind and the river cannot afford to stand still. The mind must go on from strength to strength till finite life is merged with infinite love, even as the river, unhasting and unresting, cleaving a mountain, traversing a plain, finding a way and brooking no denial, goes on and on until it meets the sea.



A million new subscribers

were linked to the Bell System during the past two years putting into operation a million new routes of talk, and a corresponding increase in all intervening facilities such as switchboards, cable and long distance lines.

No other country is so well equipped as the United States for telephone communication. Yet, because of this-because the telephone is so useful-the demand for service keeps growing greater.

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demand in the United States is greater than the growth of population. It is an intensive growth. An increasing percentage of the population is seeking telephone service.

The Bell System is providing for more investment, further technical achievement, more wires, switchboards and stations and more subscribers. The American people require the best service. The best service means the most comprehensive service, not only for

the necessities of to-day, but

The growth of telephone for the necessities of the future.





One Policy, One System, Universal Service, and all directed toward Better Service

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The Financial Department is prepared to furnish information regarding standard investment securities, but cannot undertake to advise the purchase of any specific security. It will give to inquirers facts of record or information resulting from expert investigation, and a nominal charge of one dollar per inquiry will be made for this special service. All letters of inquiry should be addressed to THE OUTLOOK FINANCIAL DEPARTMENT, 381 Fourth Avenue, New York.



HE United States Supreme Court has ruled that stock dividends are not taxable as income. A tax is payable on this form of income only in case the stock received is converted into cash; dividends of course may subject the owner of the shares to a surtax.

The declaration of a stock dividend means that a corporation's surplus is being capitalized. There seems to be some apprehension on the part of corporations that an accumulated surplus, if it is a substantial one, may be subjected to a tax on the

ground that it is larger than the legitimate requirements of the business demand. It has been suggested, therefore, that many of the corporations which have piled up big surplus accounts have adopted the stock-dividend method of cutting them down in order to escape the possibility of having them taxed. It is of course impossible to say whether this is or is not the case. The fact remains, however, that stock dividends have been of frequent occurrence this past autumn, and more are rumored. Many stocks have advanced in price on the strength of such

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has been added to the record of S. W. Straus
& Co.-a record of prompt payment of both principal and
interest in cash for 41 years without the loss of a dollar to any

This record has been a guide to safety and satisfaction for tens
of thousands of Straus investors, in every state in the Union
and many foreign lands.

In considering the investment of your January funds, this rec-
ord is a basis for your confidence. We are now offering a well
diversified list of sound first mortgage 6% serial bonds, in
$1,000, $500 and $100 denominations, secured by the highest
type of properties in the larger cities of the country. We sug
gest that you write for our January investment suggestions, and


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rumors; many stocks have advanced in price merely because the issuing corporations have large surpluses and speculators have professed to see good possibilities of a stock dividend.

The close observer will have noticed, however, that, while many stocks show immediate advances in price on stock dividend rumors, most of them do little advancing after the dividend is definitely announced, and in numerous instances actually register declines. What is the value of a stock dividend to a stockholder, anyway?

Suppose a corporation has ten thousand shares of stock outstanding and is paying annual dividends of $9 a share. Its dividend requirements are $90,000 a

year. Suppose this corporation decides
to pay a stock dividend of fifty per cent.
This means that the number of shares
will be increased to fifteen thousand, and
that each stockholder will now have
three shares of stock where previously
he had two. On the face of it he is fifty
per cent better off than he was before.
In order to maintain annual dividends
of 9 per cent, however, it will now re-
quire $135,000, in place of $90,000, an
increase of $45,000 a year, the same pro-
portionate increase here as in the case
of the outstanding shares. Suppose,
however, that earnings are no larger
than they were before, and that $90,000
is still all that the corporation can afford
to pay out in dividends. What happens?

Well, the dividend rate is reduced from $9 to $6, and the total amount disbursed remains exactly the same. And the man who owned two shares and received $18 a year on them in dividends now possesses three shares and still receives $18 a year. Is he any better off than he was before? Not so far as his income is concerned. He is better off if the three shares he now owns will bring more in the market than the two shares he had previously, but the market price of a stock is largely determined by earnings and dividends, so that the chances are that he is in just about the same position financially as before.

The companies comprising the Standard Oil group of corporations have for


Big Business and Complete
Banking Service

ONE of the largest corporations

in its line in the United States
began its relations with us by plac-
ing certain securities which it owned
in the safekeeping and care of our
Trust Department. Now, the cor-
poration is a customer of several
main departments.

The corporation's general banking
and loans are handled through our
Banking Department.

Through our Foreign Department
the corporation has at its command
the facilities of our branches

abroad and complete foreign bank-
ing service.

In connection with a readjustment
and increase of capitalization, we
acted as depositary and agent, and
through our Transfer Department
we act as transfer agent for the

This corporation, like many others,
has found it advantageous to have
as a banking connection an institu-
tion equipped to render promptly
and efficiently any financial

trust service.

We shall be pleased to discuss in detail with you the exceptionally
broad facilities which an account with us places at your command

Guaranty Trust Company of New York

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many years made a practice of distributing stock dividends. The business and earnings of these corporations have shown a tremendous increase during the past twenty years, and in most instances this new stock has become exceedingly valuable. People who purchase the socalled Standard Oil group of stocks and who consider only the straight cash yield do not, as a general rule, obtain a very high yield. Atlantic Refining Company stock, for instance, selling at $1,300 a share and paying dividends of $20 a share a year, yielded only slightly more than one and one-half per cent. The explanation of the high price has been of course the large undivided surplus and the prospect of a big stock dividend. Announcement has just recently been made that the Atlantic Refining Company has declared a 900 per cent stock dividend. Fifty thousand shares of stock have been authorized and but 5,000 issued; it is proposed to distribute the 45,000 shares so far unissued among the stockholders. Further, the report states that the directors hope to pay $1 a share quarterly on the new stock. Every man who owned one share of stock will now have ten shares, and, instead of $20 a share a year, he will now receive $4. But he will have ten shares instead of one and his income I will be doubled. If expectations are realized, therefore, this particular stock dividend is exceedingly valuable. They do not always have such beneficial results.

There is one result of stock dividends, however, which is always good, and that is the benefits accruing to preferred stockholders from such distributions. The declaration of a common-stock dividend means, as we have seen, that a corporation's surplus is being capitalized. It is probable that the largest part of this surplus consists of real estate, plants, equipment, and the property of subsidiary companies. When these assets are once capitalized, they cannot be dissipated, and common stock issued against a surplus of this kind means that it is to be kept as an asset. It cannot be disposed of, and the position of the preferred stock will be strengthened accordingly, for preferred stocks have a right prior to the common to all fixed assets. If, therefore, the fixed assets are increased, the result is additional security for the preferred stock.

The point for a common-stock holder to decide is whether it is more profitable for him to keep the shares received as a stock dividend, trusting that his income will be at least as much as formerly and that possibly the value of his holdings will increase, or to sell the new stock and take the cash. If he sells, he has to pay an income tax; if he holds on, he doesn't. But a bird in the hand is worth two in the bush, and oftentimes a dollar in cash proves more valuable than two dollars in prospect.

Stock dividends on the face of things are of no particular benefit, and increasing the number of shares and reducing

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dends, however, were reduced to $8 a
share, so that so far as income was con-
cerned there was no change whatsoever.
The main advantage was that the selling
price per share was reduced and, instead
of having to pay $2,000 for five shares,
the investor could buy five shares for
$400. This business of reducing the cost
per share is considered worth while in
many instances, for it is a well-known
fact that most people would rather buy
ten shares than one, even if the ten are
worth only as much as the one. It is
for this psychological reason that the
par value of so many new promotions is
fixed at a low figure. People get lots of
shares for little money, and seem to
think that for this reason they have a
bargain. It is well to remember, how-
ever, that it is more a question of what
you get than how much. And this point
applies to stock dividends, which on the
face of things seem to be a great boon
to stockholders, but which actually may
leave them exactly where they were be-

Starting a Company? fore

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C. S. DEMAREE, legal blank publisher, 708 Walnut, Kansas City, Missouri

their par value is scarcely more than a gesture. Increasing the number of outstanding shares does not increase earnings, and earnings are what make stocks valuable. Reducing the par value of a stock and splitting the original shares into smaller units does not increase earnings either; it is like giving a man two five-dollar bills for one ten. A successful sugar company a few years ago was paying $40 a share a year in dividends on its stock of $100 par. Presently par of the stock was reduced to $20 a share and each stockholder given five new shares for each old one. Divi


Q. I notice that Pennsylvania Railroad stock,
which pays 6 per cent dividends, I believe, is
quoted at about $46 a share. What is the rea-
son for this, and why should a stock like Penn-
sylvania yield over 12 per cent? What is the

of Pennsylvania Railroad stock is $50 a
A. There is no catch. The par value
share and the dividend rate is $3 a share
a year, the equivalent of $6 on a stock
of $100 par. The yield on Pennsylvania
is only slightly more than 6 per cent,
just about in line with other railway
stocks of the same class.

Q. Please suggest some bonds for investment
purposes which bear the highest rate of interest
consistent with safety. What do you think of
first-mortgage real estate bonds?

A. We think very well indeed of firstmortgage real estate bonds, and in all probability they would meet your requirements as well as anything you could find. The one thing to make sure of in buying this kind of investments is that the house with which you deal is sound, reliable, and conservative.

Are You An Investor?

During the past year the Financial Editor of The Outlook
has helped hundreds of Outlook readers to solve intelli-
gently their particular investment problems. Perhaps you
are contemplating a shifting of your present holdings
or have fresh funds to invest. In either case we shall be
glad to give you specific information on any securities in
which you may be interested. A nominal charge of one
dollar per inquiry will be made for this special servive.

The Outlook Company, 381 Fourth Ave., New York

Safe Bonds

For Investment

The Solution
of Your


HE extent and reliability of information at hand influences the right solution of investment problems-as it does with other business matters.

Around the first of the year

You may have interest money or principal from bonds maturing, available for reinvestment.

Examination of present investments may reveal opportunities for more effective employment of your funds. If you want to increase your bond holdings during 1923 you can assure yourself of making the most steady progress by beginning a systematic investment program now.

Our current issue of "Safe Bonds for Investment" will help you, whatever your investment problems may be. Lists and descriptions of a wide range of Government, Municipal, Public Utility and Industrial Bonds are given-together with other information and suggestions of timely value.

Write for Booklet OM-23

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