Paying The Dividend

Next, let us suppose this same bank has declared a quarterly dividend of two per cent. on its stock payable 1st September to stockholders of record 15th August. In all advertisements of dividends this legend will be seen. It means that the bank gives formal notice beforehand that the parties who own the stock on the evening of 15th August will receive the dividend. In the head office general ledger, $20,000 will have been debited to profit and loss account and credited to "Dividend No. 3," let us say. A balance of the stock ledger is taken as at 15th August, and the $20,000 is distributed among the holders of the stock at that date.

The stock clerk has always to exercise great care in the matter of allowing transfers and transmissions. He has to see that they are legal and proper in every way. If there is a tax on transfers, that must be paid; he must be satisfied that the party wishing to transfer has the right to do so. Very often it is necessary to consult ancient wills or other documents which are kept on fyle, as stock is sometimes put into the names of certain holders, but the right to transfer withheld.