Share (finance)

“ So long as every dollar of stock issued by a corporation is represented by a dollar of property, no harm can result to individuals or the public from distributing stock to stockholders.... All that can be required in any case is that there shall be an actual capital in property representing the amount of share capital issued. ”

“ A corporation has been formed with an authorized capital stock of $200,000, one-fourth of which is 7% cumulative preferred. The entire issue of preferred is subscribed for at par and 50% paid in. When the balance is paid, one share of common is to be given as a bonus with every five shares of preferred. ”

“ These two resemble coöperative societies, for the shares are personal and nontransferable, are of unlimited number, varying with the number of members, and their value is claimable by a withdrawing member. The share seems to be demanded simply to provide a first working capital and the nucleus of a reserve. ”

“ As a rule, these interest adjustments are handled through the Profit and Loss account, i.e., the partners who invest less than the agreed share are considered to owe interest to the partnership, and those who invest more have an interest claim against the business—not against the other partners individually. The debit or credit balance in the Profit and Loss account resulting from these adjustments is in turn distributed among all the partners in the profit-or-loss-sharing ratios. ”

“ Reserved and accumulated earnings, so long as they are held and invested by the corporation, being part of its corporate property, it follows that the interest therein, represented by each share, is capital, and not income, of that share, as between the tenant for life and the remainder-man, legal or equitable, thereof. ”

“ There has grown up a vast system of lending and borrowing, a world-wide extension of joint-stock enterprises that involve at last the most fantastic relationships. I find myself, for example, owning (partially, at least) a bank in New Zealand, a railway in Cuba, another in Canada, several in Brazil, an electric power plant in the City of Westminster, and so on, and I use these stocks and shares as a sort of interest-bearing money. If I want money to spend, I sell a railway share much as one might change a hundred-pound banknote ”

“ Relation of the single tax to socialism. (Young, The Single Tax Movement in the United States, pages 307-312.)
CHAPTER XII PROFIT SHARING AND COÍPERATION A. PROFIT SHARING 110. THE NATURE OF PROFIT SHARING.—The essence of profit sharing is that the workmen in a given enterprise receive, in addition to their regular wages, a share in the profits which would ordinarily go entirely to the entrepreneur. The share going to the employees varies with the establishment, but generally from one quarter to three quarters of the profits are divided among them. ”

“ If any subscriber was too poor to pay $50 for a share, the subsequent dividends and payments were to be applied to purchasing the share. After reserving a fair allowance for expenses, like the redemption of capital, whenever the remaining profits exceeded ten per cent on the capital, that excess was to be divided into two equal parts, one of which was to be distributed among all persons employed by the company in proportion to their wages, and the other was to be retained by the capital. ”

“ That capital, if invested in the business of individuals, is moneyed capital in the hands of individual citizens, within the meaning of section 5219. If invested in corporations, as appears in some instances, the share capital in the hands of shareholders is likewise moneyed capital within the meaning of that section. ”

“ Distribution is by various methods. The workmen may receive their share in cash at the end of the year. Sometimes the money is placed in a provident fund for the workmen as a body; in other cases it is deposited in savings banks to the account of the individual workmen. In still other cases the workman's share is invested in the business for him, the workman thereafter receiving dividends on this invested capital. ”

“ Every head of a family, and every prudent young man who was of age, both of the first and later comers, were admitted into a general partnership; and all agreed that the trade should be managed as usual, devoting all its profits to the payment of the debt; that every single freeman should have a single share, and that every father of a family should have leave255 to purchase a share for himself, another for his wife, and one for each of his children who lived with him, and that every one should pay his share of the debts, according to his number of shares. ”

“ The shares of these factors in production must stand in some relation with each other, such that two of them being given the other is determined, or that, one being given, the joint share of the other two is determined. In current economic doctrine there is no correlation between the laws determining the shares of these factors, and the nomenclature does not clearly or correctly express the shares into which wealth is divided. It is common for economists to speak of the division into rent, wages, and profits. ”

“ In the catechism of capitalism, shares represent the part- ownership of an economic enterprise, usually a firm. The value of shares is determined by the replacement value of the assets of the firm, including intangibles such as goodwill. The price of the share is determined by transactions among arm's length buyers and sellers in an efficient and liquid market. The price reflects expectations regarding the future value of the firm and the stock's future stream of income - i.e., dividends. ”

“ Profits first pay the agreed “wages of capital,” usually 5%, and of what remains the main part goes to the employees as a dividend on their wages, and to the customers as a dividend on their purchases. In well-established societies the dividend on wages averages about 1s. on the £. This is not usually paid in cash, but credited to the employees as share capital, whereby all may become members. Besides other producers’ associations, more or less co-operative, there are over a hundred co-partnership societies at work in England, against a dozen or fifteen in 1883. ”

“ In a joint stock company, on the contrary, no member can demand payment of his share from the company; but each member can, without their consent, transfer his share to another person, and thereby introduce a new member. The value of a share in a joint stock is always the price which it will bring in the market; and this may be either greater or less, in any proportion, than the sum which its owner stands credited for in the stock of the company.
Secondly, in a private copartnery, each partner is bound for the debts contracted by the company to the whole extent of his fortune. ”

“ Originally the stock of a company taken collectively represented all the capital invested, and each share entitled the owner to a given portion of the total income earned. The shares were issued in regular denominations in terms of money, and this amount expressed on the face of the stock remained fixed. But as a business proves more or less profitable, the value of a share of its income rises and falls regardless of the original amount of stock issued. ”

“ If capital consumed its share, the sum total of capital could not increase. It would remain constant. If you will look at the economic history of the United States, you will see that the sum total of capital has continually increased. Therefore capital does not consume its share. ”

“ In this manner a portion of the value of each exempted security reflected in the capital, surplus, and profits is deducted before the value per share is determined by dividing the capital surplus and profits so diminished by the number of shares outstanding. ”

“ My plan has been to find some one who needs the money and who would work on a percentage basis—share and share alike. We can then get the money ashore, negotiate the older coins that possess more than their face value, bank the current coins and be prepared to use the wealth exactly as we see fit. ”

“ Adjustment of Capital Contributions.—Whenever a partner contributes more than his agreed share, it is customary to allow him interest on the excess amount, and other partners whose investment may be less than the agreed amount are usually charged with interest. ”

“ In the partnership, however, where separate investment and personal accounts must be kept with each member, the correct valuation of the assets is of importance, inasmuch as the property of the partnership is the joint property of all partners and all will share ultimately in the effect of any under-or over-valuation at the time of investment. The partners’ accounts are set up for the purpose of showing their respective interests in the enterprise, and after investments are once brought onto the books these accounts govern the equities of the various partners. ”

“ We have a million or a million and a half of capital, and, conducting the business of the bank within the law applied to bankers, we can earn any dividend we like, and we can divide it, even up to 40 or 50 per cent., and it has been done, and nobody finds any fault. Now, we might start a manufacturing establishment and we can divide any profits that we can legally make up to 40 or 50 or 100 per cent., or we can start a mercantile establishment and conduct it so as to bring any profit—there is no limit so long as we are within the laws of trade. ”

“ A member of a co-operative store who owns 100 shares receives 100 times the amount of dividends that the man receives who owns only one share. The co-operatives argue justly that the woman who bought $200 worth did twice as much toward the making of the profit as the woman who bought only $100 worth. They therefore decided that this woman is entitled to twice the amount of profit. This form of co-operation is about the best we know of. ”

“ Article sixth—It is furthermore understood, that in case any one of the aforesaid proprietors should at any time hereafter be disposed to sell, transfer or dispose of his share of stock owned in the aforesaid company, he shall first pay to said company all the liabilities or indebtedness of said share of stock, and then give said company the preference of purchasing and owning said share of stock, at the same rates by which said proprietor may have an opportunity to sell said shares of stock. ”

“ For instance, although the net profits of a single proprietorship and of a partnership are usually determined in the same manner, there is nevertheless variation in the treatment of some items such as salaries, drawings, interest on capital invested, etc. The partnership form, like the single proprietorship, contemplates an investment on the part of the owners not only of capital but also of time and effort. This is one of the differences in working organization between these forms of business and the corporation. Investment in the corporation is of capital only. ”

“ A number of persons become members, each taking one or more shares. Each shareholder is required to pay into the treasury a certain sum each month. There is thus created each month a new capital sum which can be loaned to some member who may wish to borrow it and be able and willing to give security and to pay interest. The borrower will afterward have to pay not only his monthly dues, but the interest on his loan. ”

“ Sources of Capital.—From an accounting viewpoint, the capital of any business enterprise is the excess of its assets over its liabilities. Usually, the main fund of capital is secured by original contribution. In a partnership, the partners’ investments provide the common partnership fund. Thereafter, additions to the capital may be secured in several ways:
1. Profits may be left in the business instead of being withdrawn. ”

“ We need to make sure that the valve of aggregate monetary supply is well controlled, maintain moderate growth in M2 money supply, credit, and aggregate financing, ensure a reasonable, stable level of liquidity, and increase the proportion of direct finance, particularly equity finance. ”

“ Stockholders would be promised that their money would be paid back in five years, with interest at six per cent. per annum, and, in order that men of all classes might take part in the work, shares would be put at low figures. The inducement to take shares is that good is done to our fellow-countrymen without any loss to ourselves. The company purchases a tract of land; cash in hand, the land would cost but little. Immigrants, in purchasing it from the company, would give back a mortgage, promising to pay the full price in four or five years, with interest at eight per cent. ”

“ The market wage of our industry is paid to Labor and a minimum of 6% is paid to Capital. After these have been paid, together with regular operating expenses, depreciation reserve, taxes, etc., and after the Sinking Funds have been provided for by setting aside 15% of the next profits for Labor and 15% for Capital, the remaining net profits are divided 50% for Capital and 50% for the operatives, and the latter sum divided in proportion to the amount of each one's pay for the period.... A true partnership must jointly provide for losses as well as for the sharing of profits.... ”

“ The first three of these deposits, at least, will be made of the total dividend of the subsidiary corporation. Not one of these six deposits represents trade. Payments of wages and rents should count as trade, but payments of interest and dividends stand on a separate footing. When a man has bought a stock or a bond, he has already bought all the income which is to come from them, and to count the interest and dividends as separate items is double counting. They are payments, but not trade. ”

“ The capital stock of said society or firm shall not be less than four millions of dollars; to be divided into shares of fifty dollars each; and may be increased to any amount, at the discretion of the Directors. ”