JAS. H. OLIPHANT & CO.
tillable; in every year since 1919 contract cancellations have re-
turned more acreage to the company than sold, but with the
storm. over settlers are reappearing in the country.
Unification with Great Northern Ry., now proposed, is the reason-
able outcome of joint ownership of Burlington which neither
would give up. Savings calculated to result from common opera-
tion of exceeding 27,000 miles of road are $10,000,000 or $2 on
Northern Pacific shares. In addition an equity of $1 to $1.50 per
share in Burlington earnings micht be taken.
All ready for a renewal of empire-building the Northern Pacific
Ry. since 1917 has equipped the 3,000-mile main line from Twin
Cities to Pacific Coast with automatic signals for efficient opera-
tion, adopted 100-pound rail as standard, and added 7% to loco-
motive power. The 1926 earnings reaffirm the investment value
of the stock, and the eventual correction of rate inadequacies
together with a gradual recovery in farming, mining, and lum-
ber promise eventually the 7% dividend and a price of par for
the stock again.
Pennsylvania R. R.
Prestige of Pennsylvania R. R. was bred in the payment of divi-
dends every year since 1847 and found refreshment last November
when the rate was raised from $3 to $3.50 or to 7% on the $50 par
shares. Just as a reduction to a $2 rate lasting from May, 1921 to
November, 1922 displayed the adverse conditions then encountered,
So the recent increase means the way is clear again, for excepting
Six quarters at 7% between 1900 and 1921 $3 or 6% was the regu-
lar distribution.
Steadily if slowly the proportion of revenues taken by operating
expenses has been brought under control and accordingly the net
for dividends has been expanded, viz. :
Share Earnings Operating Ratio
26.20 71.5%
£25 78.4
~ 80 80.2
50 81.9
25 82.6
30 86.1
Reducing the expense ratio two points with revenues exceeding
$700,000,000 a year adds $1.40 to share earnings.
Equity in Pennsylvania R. R. is different than it was ten or more
years ago. The same amount of $499,266,000 stock had the residue
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