profits, let us see if we cannot arrive at a small patch of solid ground. Let us take the profit for granted on our confidence—usually well based—in the integrity and prudence of the Board, and test our opinion of the company's soundness by the use that they make of it. As a rough generalization it may be said that this soundness will be in an inverse ratio to the proportion which the profit distributed as dividend bears to the amount of the profit declared. If only half the profit is distributed to shareholders all is very well (always barring the industrial risk that may overwhelm the best financed industrial concern); if nine-tenths of the profit goes in dividend things do not look nearly so well; if all the profit is distributed and still more if the dividend is only paid by drafts on reserves or on the amount carried forward, we are justified in shaking our heads, unless this action is accounted for by special conditions which are not likely to recur. But this subject deserves a chapter to itself.
