THE RAINY DAY
THE PRACTICE OF SAVING “Dividends distributed by American corporations during the first five months of this year represent a gain of 21 per cent, over the figure for the corresponding months of 1935. It is closely in line with the recovery m business activity over the same period, but it is not in line with corporate profit, since this total during the first half-year will probably prove to have been at least 40 per cent, higher than a year ago and possibly 50 per cent, higher. Yet there are two good reasons for this apparent discrepancy. First, dividend changes tend to lag behind the immediate business movement, whether it be up or down. Second, a great many companies are wisely conserving a portion of their profits to rebuild reserves that were pulled down in the depression years when dividend payments exceeded earnings. The practice of saving for a rainy day may not be as popular as it used to be, but American business still believes in it. If it had not so believed, the late depression would have been much worse.”—The “Magazine of Wall Street.”
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Bibliographic details
Te Awamutu Courier, Volume 53, Issue 3807, 11 September 1936, Page 5
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188THE RAINY DAY Te Awamutu Courier, Volume 53, Issue 3807, 11 September 1936, Page 5
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