Word: squibbs
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...ideas of employe profit-sharing and of inviting consumers to become stockholders were probably not familiar to Surgeon Squibb. There was nothing of that sort in the Navy, very little of it in business. Now that both these policies have become commonplaces, the successors of Surgeon Squibb have produced an idea that is more or less of a novelty in 1929. What they propose is to invite not employes* nor consumers, but retailers, to become both stockholders and profitsharers...
Several years ago Squibb (always a fairly close corporation) permitted a number of retailers to buy shares of participating preferred stock. The present plan goes much farther. From the retailer's standpoint it works in some such fashion as this...
...made annual purchases of $500 a year from Squibb he is allowed to buy ten shares (at $50 each) of the 6% cumulative Distributors Preferred stock of a new company, Squibb Plan, Inc. With each $50 he puts in, Squibb Plan buys a share of the parent company's common, now paying $1 a share in dividends†. In addition Squibb Plan receives a sum from the parent company equal to 10% of the amount of the retailer's purchase of Squibb products and an additional 10% on the increase of his purchases over the previous year...
...Squibb Plan thus would have an income of $10 on the common stock it bought with the retailer's money. If the retailer's purchases come to $600 in the next year, Squibb Plan gets 10% ($60), and another 10% ($10) on the increase in the retailer's purchases. So all told Squibb Plan gets $80. Out of this it pays the retailer 6% ($30) on his money. Of the remaining profit ($50) half goes back to the parent company and the rest ($25) is prorated among the retailers in proportion to the amount of their direct...
...more dividends are paid the retailer would still get his 6% and probably something besides from Squibb Plan. But either increase in dividends or increase in his Squibb purchases will add to the retailer's profit...