JAS. H. OLIPHANT & CO.

paid indirectly on $8,600,000 mortgages of subsidiary warehouse
companies. Any reasonable profit margin covers this total eapital
 levy with ample to spare.
Concern of the management, since taking hold in the fiftieth
year of this oldest mail order house to deal with the effects of
$17,743,000 losses in 1920-21, was primarily to expand sales. The
business increased as follows :

1926
1925
1924
1923
1922

.$183,801,000
170,593,000
150,045,000
123,702,000
84.739.000

It was made known in 1926 that effort would be directed rather
to improvement of net earnings thenceforth.

Five years’ aggregate sales were $712,879,000 and net earnings
shown after taxes were $41,163,000 or 5.8% of the gross. After
paying dividends, including in 1925 the last of $4,754,000 preferred
 and class A accumulations, there remained $29,772,000 for
development of the company. New plants were opened at Oakland
 in 1924, and Baltimore (cost $2,000,000) in 1925, and
additions made at Fort Worth in 1924, Kansas City (capacity increased
 25%) and St. Paul in 1925, and Baltimore (new plant enlarged
 40%) and Oakland (cost $550,000) in 1926. Despite the
outlay on property, no bank loans were shown at December 31, 1922
to 1926 inclusive, and $24,000,000 was added since 1921 to working
capital. Resort to financing was only when in 1926 $5,750,000
5% bonds were sold for subsidiary account. With the treasury
replenished from the proceeds and with $1,224,000 sinking fund the
$4,250,000 7% preferred stock issue was retired at 115 at the yearend.
 The finish of rehabilitation work was signified by beginning
common dividends at $4 rate in November last.

Record of earnings for the common stock is $2.05 a share in 1922,
$4.40 in 1923, $6.20 in 1924, $8.05 in 1925, and $6.25 in 1926.
These results were after $500,000, equal to 44 cents per common
share, appropriations to sinking fund and surplus in years before
1926, and about $245,000, equal to 21 cents per common share, payment
 of preferred dividends in every year, both of which charges
are now eliminated. Thus real earnings of Montgomery Ward were
nearly $2.25 a share less in 1926 than in 1925, attributed officially
to declining commodity prices, greater proportion of small-profit
merchandise sales, and special expenses of opening the Baltimore
plant and of increasing catalogue circulation. Unofficially, the
automobile tire sales, perhaps $30,000,000 in amount, are believed
to have at best contributed nothing to net, although the strain of
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