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as many water powers, feeding into one general motor in the power house of a cotton mill situated near a railroad and miles from any of these water-falls.

EARNING CAPACITY.

The earning capacity of cotton mills is dependent primarily upon the general economic situation of this country, although our exports to the Orient are quite an item. In three years, we have shipped to China $53,000,000 as compared with England's export trade to China of $139,000,000. Trade returns show a world's market in 1907 for more than $500,000,000 worth of cotton cloth and our share of it reached the magnificent total of $15,000,000, while we supply less than one-third of one per cent. of the demand for cotton yarns. Not until we secure our share of the export trade will the cotton mills of our country show stable earnings. Our cycles of prosperity and depression are so frequent that they serve as a severe handicap from a manufacturing, commercial and financial standpoint, but if we could balance local economic reverses with prosperity in foreign countries and throw the balance of our production to export, we would then maintain an equilibrium of earnings.

The accompanying table illustrates very forcibly the earnings on both “print goods” and “ fancy goods" mills. During the past year the cotton industry was more prosperous than in any previous year in the history of the cotton manufacture.

“ Plain goods" and "fancy goods" were alike in abnormal demand and earnings responded accordingly. Because of the broader market for plain goods, it does not necessarily indicate that stocks of “plain goods ” mills are more desirable, for one must consider the average earnings for a period of years. There is no question but that greater dividends are being paid on “ fancy goods” stocks than “prints ", but the aggregate amount of dividends paid since the incorporation of a particular“ print goods" mill will compare very favorably with the same figures of a “ fancy goods ” mill.

The cotton industry is a tremendous opportunity, and it is within our power to develop this opportunity. It is on the threshold of the greatest economic development in the history of the country and, if we put our shoulders to the wheel, within twenty-five years we will be manufacturing the greater portion of our entire production of raw material and be supplying the world's markets with finished products.

We can do this because our machinery is as good as any in the textile world. We have the advantage of the cotton yield within our own boundries and there is reason to expect a greater efficiency of labor from our operatives by interesting them in the ownership of the industries, such as has already been accomplished very broadly in the manufacture of metals.

In short, as was stated by Mr. D. A. TOMPKINS at a meeting of this Association many years ago, "As long as a bale of American cotton is sent across the Atlantic, so long will there be opportunities for more American cotton mills."

DIVIDENDS PAID ON COTTON MILL STOCKS. The liberal dividend policy of leading cotton mill corporations in New England should be the first consideration of the prospective investor. The tables accompanying this paper narrate very forcibly the dividend history of cotton mill stocks. During the past eight years, which period constitutes an economic cycle of our industrial welfare, such seasoned textile stocks as Bates, paid an average annual dividend of 164 per cent., Dartmouth, 193 per cent. ; Laurel Lake, 234 per cent.; Pepperell, 194 per cent.; Troy, 23ž per cent.; and Union, 22% per cent.; and during this period have added a greater percentage to their surplus and working capital. A comparison of surplus earnings over the dividend requirements of ten cotton mill stocks with an equal number of high grade railroad bonds and industrial preferred stocks places the "textile" in an enviable position.

The tables which I have prepared prove that there is no class of investments paying as attractive dividends, earning so large a surplus and showing so great a book value per share as cotton mill stocks. The ten Fall River stocks, which I have used in one of the tables, show larger dividends, greater earnings per share and less market value depreciation than ten of the better industrial preferred stocks that are held quite extensively in New England.

Last year, Boston & Maine showed a margin of safety of earnings over dividend requirements of 1.25 per cent.; St. Paul, 5.74 per cent.; Chicago & Northwestern, 6.26 per cent.; Delaware & Hudson, 6.93 per cent., ; Great Northern, 6.01 per cent.; Illinois Central, 4.60 per cent.; New York Central, 1.42 per cent., and Pennsylvania, 2.51 per cent., while an equal number of New England cotton mills, not including Fall River and New Bedford, showed a margin of safety of an average of 972 per cent. Fall River earnings were much greater as shown by one of the tables.

To prove that cotton mill stocks have been large dividend payers over a period of years, I have prepared a table showing the dividends paid from the years 1839 to and including 1848 by a number of our leading New England cotton mills. While the legal rate of interest at that period in New England was six per cent., and in New York, seven per cent., textile mill stocks, paying an average of eight to ten per cent. annually, were selling at a discount.

THE NEW BEDFORD GROUP.

The aggregate amount paid by New Bedford cotton manufacturing corporations in dividends in 1907 was $2,489,750, or $1,110,250 more than was paid in 1906, an increase of 80% per cent. The average dividend rate paid in 1907 on the capital stock of New Bedford's cotton mills, other than those which are new, was 15.18 per cent. For the past ten years, dividends have averaged as follows: Acushnet, 21 per cent.; Bristol, 3.17 per cent.; City, 10 per cent; Hathaway, 13 per cent; Pierce, 1110 per cent.; Potomska, 5ľó per cent.; Wamsutta, 6.35 per cent.; Grinnell, 9.8 per cent. for seven years on a present capital of $1,000,000; Whitman, 7.4 per cent. for five years on its present capital of $1,500,000; Dartmouth, 18 per cent. since

HISTORICAL TABLE OF MILLS IN MASSACHUSETTS, 1839-1848.

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MILLS.

Market
Capitalization. Par Value. Price,

1848.

Appleton,
Boott,
Boston,
Dwight,
Great Falls,
Massachusetts,
Otis,
Thorndike,
Tremont,
York,

$600,000. $1,000.
1,200,000. 1,000.

450,000. †750.

730,000. 1,000.
1,500,000. 200.
1,800,000. 1,000.

450,000. 1,000.
600,000. 1,000.

600,000. 1,000.
1,200,000. 1,000.

$800.
850.
650.
800.
185.

900.
1,050.

875.
875.
930.

Average annual dividend from above mills,

5.10

9.30 14.50

15

14

7.90

3.20

6.55

3.12

4.37

*Stock dividend of 25 per cent.
† Par reduced from $1,000. All dividends given are on a par of $1,000.
X Not in operation.

During the period represented by the above table, the total amount of capital invested in cotton manufacturing in this country was $65,000,000.00, the annual value of manufactured products $47,000,000.00, and the number of spindles, 2,300,000.

1899, when it began paying dividends. New Bedford ranks first in the United States in the manufacture of fine cotton goods and fine yarns, and ranks second in the number of spindles in its cotton manufactories. All of the New Bedford mills are in a strong financial condition, equipped with the most modern machinery and are conservatively managed. Their securities are widely distributed in New England and can be easily sold.

FALL RIVER GROUP.

Fall River, the largest cotton manufacturing centre in this country, has more than one-seventh of all the spindles in the country, one quarter of those in New England and manufactures more than three-fourths of all the print cloths. In fifty years, spindles in Fall River have increased from 250,000 to nearly 3,500,000, with an aggregate capitalization of approximately $26,500,000. The accompanying tables show the average dividend rate for a number of the more prominent mills for the past eight years, and give interesting statistics regarding price fluctuations and earnings per share during the past year, which was one of the most prosperous in the history of the industry in that city. I criticise the present system of Fall River cotton mills declaring extra dividends from excessive earnings, which makes the dividend return fluctuate widely. Instead of paying twenty per cent. one year and five per cent. the next, there would be a greater stability to the securities, and it would be an act of financial prudence, to declare, say ten per cent. for each year and carry the balance to surplus. Spasmodic dividend paying and bonuses are not justifiable nor consistent with modern financiering. Fall River stocks are not as widely distributed as they should be because of this one fact, which could be easily corrected.

The advantages of a large working capital are self evident, but if.a certain piece of legislation proposed, becomes enacted, the working capital of cotton mills located in New Bedford and Fall River will have to be materially increased, either by conservation of earnings or by the issuance of new capital stock.

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