STUDIES IN SECURITIES

and common dividends $28,121,000, leaving $44,509,000 surplus.
During the nineteen and one-half years previous, $115,511,000 was
earned, $69,298,000 distributed, and $46,213,000 retained, or little
more. To the regular 7% dividends paid since 1917, following at
least 5% each year from 1903, extras of 1% in 1924, 29% in 1925,
and 3% in 1926 were added, but with five year payments totaling
$41 per share and earnings $106 the treatment of stockholders continues
 conservative. A privilege, however, to subscribe for 20%
additional stock at par was given late in 1926, and subsequently
the declaration of 114% semi-annual extra dividend indicates a
total 109% rate to be maintained, resulting in a further gain.

Management of Atlantic Coast Line avowedly is paying the extra
dividends from income other than from operations. Mostly such
revenue comes as dividends from Louisville & Nashville stock of
which 569,700 shares or 51% are owned. Dividends at the present
1% rate pay interest on $35,000,000 bonds secured by these holdings
 and leave the equivalent of 3.37% on 823,427 Atlantic Coast
Line shares.

The table below gives actual earnings on 685,862 shares of Atlantic
Coast Line stock, earnings as they would have been, without allowance
 for employment of $13,756,500 subscription receipts, on 823,427
shares outstanding since early 1927, and as applied to these present
shares the due proportions of undistributed earnings of Louisville
& Nashville :

1926.
1925.
1924
1923.
1922

On Actua’

On Present
$20.10
22.40
17.20
5.60
10

I. & N. Equity
"6.96
7.23
AAD

Had not Atlantic Coast Line increased maintenance $3,173,000 in
1926 the showing would have surpassed 1925 for $3,089,000 additional
 gross business was handled with but $2,206,000 greater
transportation cost. Unlike most others this road makes two-thirds
of the year’s earnings in five months December-April. Indication
 is for somewhat lower 1927 earnings but after a halt the six
states served appear ready to march on again.

By 1925, the main line, Richmond to Jacksonville, had been virtually
 double-tracked, in 1926, 63 miles of new first track in
Florida were put in operation and 110 miles of line were equipped
with automatic signals, showing how extension and improvement
still proceed. At $157,679,000, however, Atlantic Coast Line funded
debt is only $14,485,000 more than in 1917, and is far less than
$82,342,700 common stock plus $4,829,000 premium realized plus
1271