Sunday, March 2, 2008

thoroughly honest goods

When the stockholders approved the board's recommendations on January 8, 1884, the company reluctantly took a step it had long avoided. A preferred stock issue with a guaranteed seven percent return was launched in an attempt to entice the needed $100,000. To make these shares more attractive certain concessions were included. Common stock could not earn more than seven percent, without a corresponding increase in dividends on the preferred stock. Until a surplus had accumulated large enough to retire the mortgage, all profits exceeding a seven percent dividend had to be placed in the surplus fund. No part of this reserve could be touched for dividends unless profits were too low to pay the preferred dividend.

With its usual paternal concern, the local press rallied behind efforts to sell the stock. One editor expected it to be "taken up in a hurry by the people of our own community. Everybody is interested in securing the highest possible degree of success for the Charlottesville Woolen Mills, which is so prominent a factor in the general prosperity." The new issue was pictured as a safe, sound investment in a mill having "a wide, well-established reputation for making a first-class, thoroughly honest goods, which will enable it to sell every yard it can make."--Harry Poindexter

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