Anaconda Dividend

The recent upturn in copper prices, accompanied by signs of increased consumption and improved conditions among European nations, was hastily seized upon by many as proof that all American copper companies were in for better times. Anaconda copper suddenly passed its dividend, followed shortly afterwards by Inspiration and Calumet and Hecla, and there then came a day of hysterical selling in the stock market, in which practically all the coppers declined. Subsequently, however, the better companies have been thought more favorably of, and their stocks have risen again, particularly after Kennecot declared its regular dividend.

The Anaconda episode was caused by a too hasty resumption of the dividend a year ago, when copper momentarily advanced to 17 1/2-c-, as well as to the assumption by the company of bond interest and sinking fund requirements of $14,000,000 as a result of its acquisition of American Brass. Except for its newly acquired Chile Copper Co. properties, Anaconda is a high-cost producer, and with the red metal selling about 15% below even the 1913 price, cannot expect to operate its old deep-shaft mines at much, if any, profit. With such companies as Kennecott, Chile, Utah or Miami, the lower costs of production make present copper prices more profitable.

The advance in copper prices after Anaconda's suspension of the dividend has been in part due to the belief that this company and others in the same position intended to curtail production, in order to allow the red metal to advance to price levels where production would prove more profitable.