STUDIES IN SECURITIES 
chinery to the farms for cost reduction, and with the electrifica- 
tion of railroads, supplemented by radio, electrical refrigeration, 
and talking movies, in which General Electric is already inter- 
ested. Extensive projects of railroad electrification are under 
consideration, with only 29% of Class 1 mileage of American 
roads yet electrified. Power generation, we are told, will more 
than double in the next decade. Only 214% of farms enjoy elec- 
tric power. 
Past record, present condition, and future prospect combine to 
place General Electric stock in a secure position among indus- 
trial stock issues of real investment character. 
General Motors Corporation 
The present General Motors Corp. may be said to date from 1922 
when after the losses of the deflation period the management 
was changed and new clearly defined policies inaugurated. Fullest 
advantage was taken of the following five years of general pros- 
perity and the accomplishments provided the commercial sensation 
of the country, viz: 
1926 1921 
Net sales...........$1,058,153,000 $304,487,000 
Net earnings ....... 186,231,000 def. 38,681,000 
Working capital.... 192,006,000 96,542,000 
Cars sold . 1,235,000 215,000 
Always a leader in this 26-year-old industry, General Motors 
is the largest automobile manufacturer in the world (now making 
one car in every three produced in the United States and Canada) 
and, even more, paid out in dividends on its common stock in 1926 
the largest total in the history of industrial enterprise. 
Of the surplus available for the common stock the following per- 
centages were paid out in common dividends: in 1926, 62%, in 
1925, 63%, in 1924, 66%, in 1923, 45%, and in 1922, 23%, notwith- 
standing which there was reinvested $179.744.000 in the property 
in these years from surplus. 
We find at the end of 1926 the plant account carried net (after 
depreciation) at $310,482,000 or $99,416,000 more than at the end 
of 1921, whereas the plants in 1926 turned out almost six times as 
many cars as in 1921. The great Fisher Body plants have been 
acquired, the Pontiac and La Salle cars added to the line, and 
Frigidaire (the electrical refrigerator) has been developed (1926 
increase in investment therein amounting to $19,000,000), to men- 
tion only the outstanding developments. The conservatism of the 
plant account is obvious. This point must be considered in con- 
nection with the $55 tangible asset value of the common stock. 
[411 
he