Chapiter 12 — What Is a Dividend?
a company realizes a surplus from its operations, after having deducted
the necessary amounts to meet its obligations, and after having set
aside the required funds for depreciation and redemption, it distributes
the rest among its shareholders. If, for example, the company's
share-capital is $500,000, and the distributed clear profits are
$30,000, the company will declare a 6% dividend, because $30,000
represents six-hundredths of $500,000. The man who has ten-$100 shares
in this company, will get a dividend of ten times $6, that is, $60; the
one who has twenty shares, will get a dividend of $120. If the clear
profits are only $10,000, the dividend will be only 2 percent. And if
there remains no clear profits after all necessary payments, there will
then be no dividend. The dividend therefore presupposes a surplus.
granting of dividends to the shareholders does not cause them to lose
interest in their company. It is just the opposite that takes place. If
these shareholders are also employed by the company, if, by their work,
they contribute to the production of manufactured articles in the plants
of the company, will they become lazy, become lax, because they draw
dividends, over and above their wages or salaries? It would be stupid to
think so. They know that only an increase in the volume or in the
quality of production will bring more dividends. No doubt they will
devote themselves more industriously to their work.
is entitled to dividends? The shareholders, those who have invested
funds in the firm, are entitled to dividends. If it is a co-operative
firm, the producers themselves, after having drawn their wages or
salaries, are also entitled to their dividends, to their share of the
surplus, if there is any, because these producers are the shareholders.
And once again, where do the dividends come from? They come from
surpluses; their figure is determined by the surplus figure. The
dividends are not money taken from certain shareholders to give to
others. The dividends do not create debts for the company, since the
company actually distributes its very surplus.
elementary notions are not new to anyone, but to recall them may be
helpful when we deal with the “national dividend” or the Social
Credit dividend. It is so common to hear from critical quarters, who
perhaps have not even looked into the subject: “These dividends, they
are like welfare; they will make people lazy... No one will want to work
course, these critics are making mental exceptions of themselves. They
never believed for one moment that if they would draw a dividend of some
five-hundred or six-hundred dollars a month, that they would then lie
down on long chairs, thanking the Lord for having put their daily bread
into their mouths. No, not they, because they have a splendid moral
outlook, a developed intelligence, and they will always be ready to work
to raise their standard of living... But it is of the others that they
are thinking about, the “mob”, the publicans without virtue or
intellect whom they do not deign to look at, much less educate. For
these puritans, the “mob” exists to water the earth with its sweat
and tears... and live in perpetual privation.
each person today is entitled to the heritage bequeathed by past
generations. When a person dies and leaves goods to his heirs, does he
question whether these heirs are just people or sinners? Is their
inheritance denied, under the pretext that they will not know how to use
A few considerations are suitable here on this notion of common heritage, of which all living people must be beneficiaries.