STUDIES IN SECURITIES

In 1925-6 foreign sales were just under 10% of total sales whereas
in 1922-3 the ratio was under 59%.

The Ethyl Gasoline Corp. is owned equally by General Motors
Corp. and the Standard Oil Co. of New Jersey. Substantial
economies are claimed for this fuel and after some unfortunate ineidents
 in development it is now proven entirely safe for public use.
It is officially stated this unit will come into earning power in 1927
and that within a year Ethyl gasoline will be available through this
country and Canada and in many foreign countries.

The last and probably of smallest possibilities is the investment in
the Yellow Truck & Coach Manufacturing Co. carried on the books
at $24,091,000, which to date has been unsatisfactory.

General Motors provides for the investment character of its stock
the qualifications of dominance in its field, excellent management,
strong capital structure and treasury position, and subsidiary activities
 of potential size which may offset the rather volatile nature of
its industry.

Great Northern Ry.

In aggregate and per share of stock the Great Northern Ry. earned
more in 1926 than any road in the northwestern territory
had in ten years. The 10.4% share net was last exceeded with
11.1% in the twelve-month to June 30, 1916. It is not enough,
however, to approximate the old figures, for Great Northern began
 1927 with $106,000,000 more property investment than ten
years previous, and this must contribute earnings before the company
 becomes as well off as formerly. Six percent on that amount
would have meant over 2.5% more earnings for the stock.

The vitality of this railroad is suggested by the record of uninterrupted
 dividend payment for thirty-six years including nearly
twenty-four at 7% rate and no less by the progress made lately
under handicaps. Between 1917 and 1927 surplus after dividends
amounted to $44,000,000 while increase in funded debt (exeluding
 $7,387,000 added in refunding the ‘‘Burlington’’ stock purchase
 bonds which continue self-supporting with $250,000 present
annual margin) was $55,280,000 and these two sums were applied
to improvements involving 149% addition to locomotive power,
35% increase in 90-pound or heavier rail, and 100% installation
of automatic signals on the St. Paul-Seattle main line. When
freight traffic in 1921 and 1922 fell 30% and 16% below 1916-1917
 volume, the earnings for Great Northern stock were 3.5%
1431