STUDIES IN SECURITIES 
from the Coal Co. and occasionally but not since 1919 about 
$1,000,000 annually from the Iron Co., so earnings gained on 
balance. 
Disclosure of earnings, upon the change of Reading to a simple 
railroad operating company, indeterminate before then, showed 
net per share of common stock $14 in 1923, $8.80 in 1924, $10.20 
in the anthracite strike year 1925, and $11.20 in 1926. Noticeably, 
the proportion of revenues taken by expenses still is high, 72.5% 
in 1923, 76.3% in 1924, 75% in 1925 and 74% in 1926, compara- 
tive with less than 709% in the last decade, and 2% reduction would 
bring $1.50 more share earnings to the common stock. Included in 
expenses were depreciation and retirement reserves for equip- 
ment of $6,444,000 in 1926 and $5,913,000 in 1925; effect of 
these was to increase the balance in reserves $8,400,000 in two 
years or by $6 per common share; perhaps a consequently im- 
proved equipment will not continue to call for reserves at this 
rate. Maintenance also in the past two years has included laying 
300 miles with 130-pound rail. 
The property is represented by $121,900,000 bonds, $140,000,000 
stock, and $99,030,000 surplus. Of the bonds $41,242,000 bear 4% 
and $61,362,000 414% interest, while of the stock $70,000,000 
is 49, preferred, allowing a moderate return earned on property 
value to bulk large on the common stock. Book value is $121 for 
the 1,400,000 $50-par common shares and roughly $150 giving 
effect to property value admitted by the Government and mar- 
ket value of Jersey Central stockholdings. Common dividends 
began with $1.75 in 1905, increased to $2 in 1906, $3 rate in 1910, 
and to $4 in 1913. Declaration of $1 extra last December likely 
was the forerunner of a well-justified increase in the regular divi- 
dend. Reading common is an equity whose full measure the mar- 
ket is beginning to take. 
Reynolds Tobacco Co. 
For some years the R. J. Reynolds Tobacco Co. has led competitors 
in earnings reported ; its ‘‘Camel’’ brand has been the largest sell- 
ing cigarette and is reputed to take nearly half the entire demand 
(total cigarette consumption has increased 85% since 1920) ; in ad- 
dition the company has the popular ‘‘Prince Albert’’ pipe tobacco 
and other brands including chewing tobaccos. 
Expansion in earnings available for dividends after maximum 
allowed reserves for taxes and depreciation has been as follows: 
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