GENERAL MOTORS RESUMES DIVIDEND

The New York Times
November 17, 1922

At 50 Cents a Share Action of Directors Will Distribute $10,275,295.

EARNINGS ABOUT $55,000,000

Recuperation of Automobile Industry Reaches Record-Breaking Proportions.

The General Motors Corporation, which in the automobile industry ranks second to the Ford Motor Company in regard to production, yesterday resumed dividend payments on the 20,550,590 shares of common capital stock of no par value outstanding. Directors at their meeting declared a dividend of 50 cents a share, which in money value will call for a distribution of $10,275,293 from the company's treasury, out of estimated earnings of $55,000,000, after all deductions for charges and taxes, for the year 1922. As the dividend is the only one paid by the company this year, a good portion of this year's earnings will be added to surplus account.

Resumption of dividends on the part of this company was made possible by the speedy recuperation of the motor car industry from the depression which prevailed in the trade during the greater part of 1921. The recovery in the motor car industry this year has been extraordinary. Last year, when the demand for cars fell off sharply, much was heard regarding the belief that the industry had reached the saturation point. The record of the industry, however, dispelled this belief, according to leaders in the trade. The year 1922 started with record-breaking business in the Spring, and the demand for cars continued throughout the year, with the result that the production of high, medium and low priced cars for the current year will establish a new high record in the history of the trade.

In announcing the dividend the company in an official statement pointed out that the disbursement could not be looked upon as a regular quarterly dividend, as the Directors were of the opinion that, even though the outlook for the industry was encouraging, consideration of the question of placing the stock on a regular dividend basis was deferred until a later date.

The dividend of 50 cents a share will be distributed among some 50,000 common stock holders of record on the company books at the present time. In addition to the common stock holders the company reports approximately 20,000 holders of preferred and debenture stock. The corporation which will benefit most from the dividend is E. I. du Pont de Nemours & Co., Inc., which, through its subsidiaries, is the largest individual holder of the common stock of the General Motors Corporation. The du Pont holdings amount to 7,400,000 shares, so that the cash dividend on this block of stock owned alone amounts to $3,700,000.

No dividends on General Motors common stock have been paid since the last quarter of 1921. In that year the company made payments at the rate of $1 a share quarterly. On Jan. 4 of this year, when the Directors met to take action on the quarterly dividend covering the first three months of this year, it was decided to suspend dividend payments.

Accompanying the announcement of the dividend, an official statement issued by the company said in part:

"The financial position of the corporation is thoroughly satisfactory. Since the first of the year its indebtedness to banks has been entirely discharged, its liabilities have been reduced by upward of $45,000,000 and it now has no indebtedness other than for payrolls, supplies, &c. A comparison of balance sheets as of Sept. 30, 1920, and Sept. 30, 1922, shows a reduction of $110,000,000 in liabilities.

"In the year 1920 the corporation produced on an average about 31,867 cars per month with an investment in inventories equal to about $5,548 per car; the corporation is now producing about 45,000 cars per month (an increase of nearly 50 per cent.) with an investment in inventories equal to $2,530 per car. In other words, the average investment in inventories per car in 1920 was 2 1-5 times that now required.

"In other respects the corporation has materially fortified its position and the outlook for the year 1923 is considered entirely satisfactory."

The dividend on the common stock is payable Dec. 20 to stockholders of record Nov. 27.