STUDIES IN SECURITIES

pany. Adding the equities in undistributed earnings of the roads
to be leased, the results would become per share:
1928. . ke... 519.70 102%... 320.70
1025... = 18.15 1907 seen 112105
LOS. a 0.75 a SE a

These figures do not include the equities in 50% control of Pittsburgh
 & Lake Erie R. R., 25% or more interest in Reading Co., or
in considerable other property not promising much greater earnings
 contribution soon.

Giving effect to leases proposed, the New York Central will be
responsible for approximately $1,150,000,000 publicly held obligations
 having a fixed charge on earnings, and $421,584,000 stock as
increased by 109% subscription in 1927 becomes 27% of capital
on this basis. The company proper has improved the ratio from
25% in 1920 to nearly 389% in 1927 and has remaining some
$62,000,000 stock authorized for sale on occasion to replace maturing
 debt. Excluding equipment notes the maturities of New
York Central, Big Four, and Michigan Central are $73,834,000
prior to 1930 and $128,356,000 in the next five years. An anchor
to windward is the maturity between 1990 and 2361 of a total
$502,359,000 bonds averaging only 4.018% interest rate. Under
a policy of substantial financing from earnings the four lines
in 1926 paid the public only 35% of the amount available for
common dividends and retained $49,528,000 surplus and in the
six years paid 429% and had left over $218,000,000 or $57 a share
if applied to New York Central stock.

Dividend record of New York Central R. R. and the predecessor
company has been uninterrupted since 1870. In 1923 the 5% rate
was raised to 7% and in 1927 to 8%, with which new dividend the
mid-1927 offering of 10% new stock was facilitated. The shares of
New York Central R. R. represent a tenth of the entire railroad
business and a service indispensable to eight states with half of
the country’s population producing a quarter of farm crops, half of
mine products, and two-thirds of all manufactures. Under the circumstances
 the stock at 150 level is by no means over-valued.

New York, New Haven & Hartford R. R.

The surplus after charges for New York, New Haven & Hartford
R. R. in 1926 was $8,243,000 compared with $7,418,000 in 1925,
$2,999,000 in 1924, deficit of $2,917,000 in 1923, of $4,911,000 in
1922 and $15,327,000 in 1921, the first year of private control
after the period of Governmental operation and guaranty. Thanks
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