JAS. H. OLIPHANT & CO.

Under conservative guidance Chicago & North Western Ry. in
twenty years ending 1917 earned $244,000,000, paid $171,000,000
preferred and common dividends, and sold at par over $106,-000,000
 common stock, accounting for a strong capital structure
which an addition of $125,573,000 to funded debt since 1917 has
not at all seriously impaired. Present capitalization is $327,524. -
000 funded debt, $22,395,000 7% participating preferred stock,
and $156.743.000 common stock.

This excellent property seemed to lose heart in the post-war stress,
earning for the common stock nothing in 1921, 5% in 1922, 4.9% in
1923, and 4.2% in 1924. Early in 1925 some important changes
in management were made with perhaps initial effect in 6.3%
earnings in 1925 and 6.9% in 1926.

Common stock on which earnings applied last year included $11,-587,000
 issued in exchange for Chicago, St. Paul, Minneapolis &
Omaha Ry. stock of which the remaining minority may be all
acquired by issuing $3,673,000 additional. Since 1883 North
Western had owned 50% or $14,920,000 of ‘‘Omaha’’ stocks and,
with the remainder secured, a merger is due to follow. An immediate
 reason is to accomplish the refunding of $40,000,000 Omaha
5% and 6% bonds in 1930 under the cloak of North Western
credit. This coming North Western system would compare well
in many respects with the model Chicago, Burlington & Quincy,
as follows, 1926 figures expressed per mile:

Siock ....r-Funded
 Debt .....
Operating Revenues
Operating Expenses .
Miles, first main track . . 2A,
Miles, additional track ... 1.346

N. W Svstem
~&iv
L410
~817
01-4

C.,.B. &Q.
$18,167
22,298
“7,154
2,384
"404
1.097

The difference in operating costs is one susceptible to correction.
Combined earnings in recent years would have varied little from
actual results for North Western common, but up to 1917 the
Omaha regularly earned above $2,000,000 comparative with barely
$800,000 in the two years past, and in time the advantage should
prove important. Itself in turn North Western appears destined
for linking with Union Pacific. The traffic interchange of the two
is suggestively out of proportion to the 3% stock interest Union
Pacific has held for years.
Intrinsic value about $190 for Chicago & North Western Ry. common
 shares as indicated by Government valuation at minimum
1914 unit costs, shows the market price to be low still, provided
carning power is to be re-established. Expenses were 78.1% of
1321