COURTAULDS' CAUTION.
It is significant of the confidence felt in the management of Courtaulds that the rise in the price of the shares, occasioned by the bonus announcement of 100 per cent. in new shares, has been well held. There is little doubt that the advance would have been much greater but for the pains taken by the directors, when making the dividend and bonus announce- ment, to caution shareholders against assuming that because the capital was being doubled, dividends were going to rise in the same proportion, or were even going to rise at all. This same caution was emphasized by Mr. Samuel Courtauld at the recent annual meeting. Among other things, the chair- man emphasized the great effect produced upon the profits of a company having the enormous turnover of Courtaulds by even the smallest decline in price. He also deprecated the attempt in some quarters to minimise the directors' warnings as to future dividends as mere "eye-wash." I can assure you, he said, it is not "eye-wash," and that in recommending dividends, the directors will take into consideration nothing but the earning power of the business, which cannot be affected by any bonus issue of capital. Nevertheless, Mr. Courtauld was also able to take a fairly optimistic outlook with regard to immediate prospects.
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