In cases where surplus has accumulated with great rapidity, it is more and more customary for the corporation to recognize this accumulation by issuing new shares in the form of stock dividends. As has been previously explained, this procedure does not necessarily mean increased cash returns to the stockholders and does not affect their relative interests in the corporation, but it is convenient and helps to increase the market value of the stock. In recent years, some of the motor companies which have been highly successful have declared notable stock dividends. The Chalmers Company, for example, was incorporated in 1908 with a capital stock of $300,000; two years later the directors declared a stock dividend of 900%, making the capital stock $3,000,000. In October, 1912, they declared another stock dividend of 33 1/3 %, making the. outstanding common stock $4,000,000; and in June, 1913, another dividend of 25% was declared, making the outstanding stock $5,000,000. Since June 1, 1911, cash dividends on the common stock have been paid at the rate of 10%. In 1915 the Ford Motor Company was said to have had under consideration a stock dividend of 2400%, increasing its outstanding capital stock from $2,000,000 to $50,000,000, but on account of some legal difficulties the plan, up to this writing, has not been carried through.

Other manufacturing companies have also had remarkable stock dividend records. Up to 1900 the capital stock of the Singer Manufacturing Company was $10,000,000, and that year a stock dividend of 200% was declared, making it $30,-000,000. In 1910 another stock dividend of 100% was declared, making the capital $60,000,000. During all this period cash dividends have been high. In 1899, just before the first-named stock dividend, cash dividends were 100%; in 1904 and again in 1909 they were as high as 30%; since the stock advance of 1910 they have been averaging 12 to 14%. Swift and Company originally had a nominal capital of $300,-000, which has been increased at various times to $3,000,000, $5,000,000, $7,500,000, $15,000,000, $20,000,000, $25,-000,000, $35,000,000, $50,000,000, $60,000,000, and finally $75,000,000.

Attention has already been called to the possibility of avoiding constant changes in capitalization - which are always of an arbitrary nature - by the use of shares without par value. It would be theoretically possible to have no shares whatever outstanding, and there is one case on record of an English enterprise known as the Undertakers of the Aire and Calder Navigation and Steamship Company, which until 1895 had no shares. The capital was bought and sold at so many years' purchase of the dividends. The modern arrangement, however, is to have shares bearing no par value. A law authorizing the issue of shares without par value was adopted in New York State in 1912.