Learn about Life in the 1920s


THE Christmas distribution of bonuses in Wall Street, when finally added up, is expected to prove the most generous ever made except during some of the flush World War years.

No accurate account of sums paid out can be made, according to the New York Times, because many firms do not announce their benefactions, but last year's total was estimated at $50,000,000, and it is expected that the Wall Street firms paying bonuses are being no less generous this year. In fact, some firms which have never paid bonuses will start the custom this Christmas. Probably the largest distribution, we read, is being made by banks, which have been exceptionally prosperous. Continues The Times:

The wide-spread prosperity of banks in 1926 has been strikingly reflected in a number of large increases in capital stock, in the payment of stock dividends, some of them of unprecedented size; in numerous increases in dividend rates and in several major consolidations. There has been a sharp increase in the general level of bank-stock prices, many of which are selling at the highest quotations ever recorded.

Stock Exchange firms, which are always among the most generous distributers of bonuses, have not profited as they did last year—except in individual instances—but their business has been good and they are preparing to give their employees a substantial part of their earnings. Total transactions on the Stock Exchange had been running well ahead of 1925 up to November 17, on which date the trading pace fell behind. At present the total for 1926 is about 4,000,000 shares under the total for the same period of 1925. Nevertheless, the comparison is not regarded as unfavorable, and there is yet a possibility of a revival of activity.

Profits of the bulk of the Stock Exchange houses have suffered also because much of the trading in 1926 has been of a professional character, with the result that commissions have been reduced. The "outside public" was actively in the market during a good part of last year, whereas public participation in the current year has been limited. Notwithstanding all of this, the earnings thus far in 1926 have been good, and commission-house employees are expecting liberal bonuses.

Many of the large industrial and commercial organizations, whose executive operations center in Wall Street, have done the biggest business in their history during 1926. Earnings, even of those companies whose operations have fallen behind last year, are generally regarded as satisfactory, And Wall Street sees no disturbing clouds as it looks ahead to 1927. A majority of these concerns pay bonuses in some form, altho some are limited to officials and others do not classify their distributions as Christmas bonuses. The General Motors Corporation, for instance, whose earnings in 1926 have been so huge as to dwarf all previous income, at various times during the year gives certain members of its organization common stock, the distribution being based upon earnings. The United States Steel Corporation, whose earnings in the third quarter of this year were the largest since the war, and whose earnings during the final quarter are expected to be impressive, makes a distribution to members of its organization after earnings have passed a certain point. Many other large organizations have similar bonus policies, and large distributions are expected.

New York Stock Exchange employees share in a Christmas "pot" contributed by the membership. Employees of other financial and commodity exchanges are rewarded either in this manner or otherwise. Liberal gifts of cash are assured for all of them.

The year-end distribution will not be confined to employees. Already a vast amount has been ordered paid to stock-holders during December, either in extra cash dividends, increased cash dividends, or stock dividends. Several hundred million dollars—the biggest aggregate distribution on record—will go into the pockets of stockholders this month.

Source: The Literary Digest for December 25, 1926