Bryan Taylor, Chief Economist, Global Financial Data
Successful companies pay dividends to their shareholders. Sometimes they share their profits by issuing a cash dividend. Sometimes they give extra shares of stock through a stock dividend or stock split. Sometime they provide dividends in kind, such as coupons for free bowling or sticks of gum.
My favorite in-kind dividend was given to shareholders in National Distillers Products Corp. (later Quantum Chemical Corp.) on October 15, 1933. And what did each shareholder receive? Nothing less than a Warehouse Receipt for one case of twenty-four pints of sixteen-year old whiskey for each five shares of stock they owned. So if you owned 100 shares of stock, you got twenty cases of sixteen-year old whiskey.
The Eighteenth Amendment to the U.S. Constitution passed on January 16, 1919, introduced Prohibition, and the Volstead Act, passed on October 28, 1919 attempted to enforce Prohibition, though not very successfully. Prohibition was repealed by the Twenty-First Amendment to the U.S. Constitution on December 5, 1933.
In between that period of time, a company such as National Distillers Products Corp. could not make any alcohol for consumption, but had to concentrate on the production of industrial alcohol and other chemicals. This meant that any whiskey they had already produced could not be sold, so they put it all in a warehouse and waited.
For the record, National Distillers Products Corp. stock went from 19 at the beginning of 1933 to 111.25 by September. The stock split three-for-one, and after that, the shareholders only had cash dividends to look forward to, but I’m sure there were some shareholders who remembered the famous whisky dividend until their dying day.
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