A valuable compilation showing the amount of railway-stock in the United States which pays dividends, the percentage of this dividend-paying stock to all outstanding stock, and the average rates of dividends over a period of years, is reprinted below:*

Amount of Stock Paying Dividends

Percentage of

Stock Paying

Dividends

Average Rate on Dividend-Paying Stock

Average Rate on all Stock

1900

$2,668,969,895

45.66

5.23

2.39

1901

2,977,575,179

51.27

5.26

2.70

1902

3,337,644,681

5540

5.55

3.08

1903

3450,737,869

56.06

5.70

3.20

1904

3,643,427,319

5747

6.09

3.50

1905

4,119,086,714

62.84

5.78

3.63

1906

4,526,958,760

66.54

6.03

4.0I

1907

4,948,756,203

67.27

6.23

4.19

1908

4,843,370,740

65.69

8.07

5.30

1909

4,920,174,118

64.01

6.53

4.18

1910

5,412,578,457

66.71

7.50

5.00

1911

5,730,250,326

67.65

8.03

543

1912

5,581,289,249

64.73

7.17

4.64

It is of especial interest to note that from one-half to two-thirds of the corporate stock outstanding in the United States during recent years has been paying dividends. It is to be presumed that the other one-half to one-third consists almost wholly of common stock which has a relatively small market value. Doubtless this non-dividend paying stock is made up only in part of securities on which the earnings are small. It must include a large proportion of the stock of new or growing corporations which are deliberately reserving their earnings for the purpose of building up the business. It is gratifying to observe the rapid increase during the years 1900 to 1908 in the percentage of dividend-paying stock and in the average rates of return. From 1908 to 1912, the earnings in proportion to outstanding stock were not far from stationary. In judging these figures, it may, however, be assumed that a part of the rapid increase in stock from 1900 to 1912 was due to stock dividends or other methods of "watering," so that the actual increase in earnings in proportion to the actual investment of capital has probably been greater than the tabulation would indicate.

* Bulletin 66 of the Bureau of Railway Economics, Washington, 1914.

In most other countries the showing could not be nearly so favorable. It is clear that under the best conditions capital which is invested in stock takes a considerable risk of going without dividend returns.