cumulative unless stipulated to be
otherwise. Certain public companies are forbidden by parliament to pay
dividends in excess of a prescribed maximum rate, but this restriction
has been happily modified in some instances, notably in the case of gas
companies, by the institution of a sliding scale, under which a gas
company may so regulate the price of gas to be charged to consumers that
any reduction of an authorized standard price entitles the company to
make a proportionate increase of the authorized dividend, and any
increase above the standard price involves a proportionate decrease of
dividend. Dividends are usually declared yearly or half-yearly; and
before any dividend can be paid it is, as a rule, necessary for the
directors to submit to the shareholders, at a general meeting called for
the purpose, the accounts of the company, with a report by the directors
on its position and their recommendation as to the rate of the proposed
dividend. The articles of association of a company usually provide that
the shareholders may accept the director's recommendation as to dividend
or may declare a lower one, but may not declare a higher one than the
directors recommend. Directors frequently have power to pay on account
of the dividend for the year, without consulting the shareholders, an
"interim dividend," which on ordinary shares is generally at a much
lower rate than the final or regular dividend. An exceptionally high
dividend is often distributed in the shape of a dividend at the usual
rate supplemented by an additional dividend or "bonus." Payment of
dividends is made by means of cheques sent by post, called "dividend
warrants." All dividends are subject to income-tax, and by most
companies dividends are paid "less income-tax," in which case the tax is
deducted from the amount of dividend payable to each proprietor. When
paid without such deduction a dividend is said to be "free of
income-tax." In the latter case, however, the company has to make
provision for payment of the tax before declaring the dividend, and the
amount of its divisible profits and the rate of dividend which it is
able to declare are consequently to that extent reduced. In respect of
consols and certain other securities, holders of amounts of less than
L1000 may instruct the Bank of England or Bank of Ireland to receive and
invest their dividends. With few exceptions, the prices of securities
dealt in on the London Stock Exchange include any accr