STUDIES IN SECURITIES

revenues in 1926, 77.8% in 1925, and 80.7% in 1924; 19% shrinkage
 means $1 more common share earnings, regardless of possible
benefit from rate readjustments. The 7% preferred stock is an
unique investment, with the privilege of receiving 3% additional
after 7% on the common and equal share after 10%, under which
from 1902 to 1920 a total 89% was paid annually. In the common
stock. investment and speculation are nicely combined.

Columbia Gas & Electric Corporation

After a quarter century of separate development the properties
of Ohio Fuel Corp. (itself a 1924 merger) were consolidated November
 1 last with those of Columbia Gas & Electric Co. and the
new Corporation took the latter name. Advantages to Columbia
are evident herein: for the new company versus the old company,
the requirement for rentals, bond interest, preferred dividends,
and $5 on the common shares is increased 1.8 times, comparative
with increases 2.7 times in gross and 2.1 times in net earnings and
3.4 times in acreage of lands representing the principal earning
asset. To accomplish this, Columbia Gas in effect added only
$210,000 to fixed charges and increased preferred stock from
$23,860,000 7% to $95,185,000 6% and common stock from
1,500,000 to 3,000,000 no-par shares (since increased by issue of
375,000 shares at 60), thereby improving an already strong capital
 structure. Since rentals, interest, and preferred dividends take
only 429, of current earnings it is clear this public utility is
held on ample margin by common stockholders.

Revenues aggregating $92,120,000 in 1926 came mostly from retail
distribution of natural gas to 4,400,000 population in Ohio and
adjacent states and electricity to about 1,100,000 in Cincinnati,
Dayton, and vicinity, with wholesale of both not inconsiderable.
Of the 4,860,000 acres of land held 760,000 or less than 169% are
operated for natural gas and less than 71,000 or 114% for oil.
Accordingly, future gas supply is assured from the vast land
reserve, potentialities of which are known, while oil and natural
gasoline production from a minor status can be expanded almost
at will.

Altogether this system property stands on the books at 439 millions,
 as the actual figure accrued during some 25 years, against
which 121 millions reserve is accumulated. Charges to reserve,
chiefly depletion of gas, run $2.70 per common share annually,
and taxes equal $2.50; both are so heavy that relief would seem
possible. After all charges the 1926 earnings rate was $6.90 a
share on Columbia Gas common stock while on official statement
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