STUDIES IN SECURITIES 
business, however, is in containers for products other than food. 
The $2 dividend is well protected (in 1926 a balance of $5,902,000 
was carried to surplus after $4,948,000 common dividend paid) 
and return of better conditions in the industry should mean 
extras. 
American Locomotive Co. 
Except for an excursion into the automobile business (estimated to 
have cost the company $7,000,000) and ammunition making during 
the war, the American Locomotive Co. from organization in 1901 
to the 1926 merger with Railway Steel Spring Co. was confined 
exclusively to the manufacture of steam locomotives. The fact 
that in 1925 the output was the smallest of any year in its history 
may have provided the final urge to diversify somewhat the activi- 
ties of this company. 
The violent character of the business is indicated in the figures of 
its locomotive output over a several years period: 
1913 (June 30) $50,000,000 1922 (Dec. 31) $129,000,000 
1915 wy 8,700,000 1923 e 90,000,000 
1919 £é 108.000.000 1925 2d 27.000,000 
Intervening years showed sharp fluctuation, the three years ended 
June 30, 1918 having the benefit of $85,700,000 aggregate ammuni- 
tion output. 
The maintenance of war profits in liquid form changed completely 
the company’s financial condition and dividend policy, though the 
nature of the business continued ‘‘prince or pauper.” Working 
capital increased from $12,327,000 June 30, 1914 to $46,436,000 
December 31, 1923. Thus while earnings dropped to only half the 
preferred dividend in 1925 from $21 a share on the common in 
1923, yet common dividends paid in 1925 totaled $9,000,000 ($8 
regular and $10 extra) compared with but $2,500,000 in 1923 ($5 a 
share). 
Similarly the integrity of the plant account was strengthened 
from profits. On June 30, 1914 property investment was carried 
at $52,609,000, later reduced $1,500,000 by sale of plants. In the 
nine and a half years to December 31, 1923, $15,255,000 was ex- 
pended on additions and betterments and $13,619,000 charged off 
for depreciation. This would indicate a real property valuation 
December 31, 1923 of $54,245,000, whereas it was carried on the 
books at $37,531,000, thus squeezing out $17,000.000 of intaneibles. 
Up to the absorption of the Railway Steel Spring Co., American 
Locomotive Co. capitalization had remained unchanged since or- 
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