During  its  early  stages  this  company  had  had  hard  sled-
ding and  there  had  been  little  opportunity  for  the  in-
siders to  pick  up  loose  change  through  stock  manipula-
tion, but  in  1928  and  1929  the  company's  condition
showed  considerable  improvement.  During  the  earlier
year  the  company  absorbed  the  Stanley  Company  of
America,  owning  a  chain  of  200  theatres  and  for  the
fiscal  year  ending  August  1,  1928,  showed  a  balance  on
the  right  side  of  the  ledger.  At  the  end  of  the  following
fiscal  year  earnings  were  in  excess  of  $17,000,000  and
the  management  took  cognizance  of  this  by  declaring  a
100%  stock  dividend,  which  amounted  to  a  two-for-one
split-up.  About  the  same  time  the  stock  was  put  on  a  cash
dividend  basis,  paying  12^  cents  per  share  for  the  last
quarter  of  1929.  This  was  raised  to  $1.00  for  the  next
quarter.  Warner  now  reached  out  and  acquired  First
National  Pictures,  a  sizeable  producing  unit,  and  the
wires  began  to  buzz  with  favorable  rumors  about  the
company's  condition — sponsored  (as  it  later  appeared)
by  a  paid  publicity  man.  The  stock  was  a  sensational
performer  in  the  post-crash  bull  market,  selling  up  to


214  YEARS  OF  PLUNDER

80%  for  the  new  capitalization,  which  was  equivalent  to
160^2  for  the  stock  before  the  stock  dividend.  In  1927
the  old  stock  had  sold  at  33  ft.  The  stock  paid  another
$1.00  quarterly  dividend  and  according  to  reports  it
looked  as  if  another  melon  was  in  sight.  Then  without  a
word  of  warning  the  directors  met  in  August  and  passed
the  next  dividend.  It  was  a  bolt  from  the  blue  and  the
stock  took  a  "nose-dive/'  ultimately  resting  somewhere
around  a  dollar  a  share.
