STUDIES IN SECURITIES 
to draw interest and so the saving does not take effect, but the ap- 
propriation thus accelerates by about $500,000 annually and $603,- 
000,000 bonds, including the present sinking fund holdings, will 
be out of the way in less than twenty years. 
More liberal participation by the common stock in earnings, 
apart from the 2534 % extras received with 5% regular dividends 
from the abnormal 10934 % aggregate earnings in the 1916-1918 
years, had a real beginning with extras 14% in the last 1923 
quarter and 14% subsequently until in June, 1926 a 7% rate was 
made regular. The 79% dividend continuing on 40% increased 
stock is equivalent to 9.80% on the old amount, and the virtual 
doubling of the cash return in less than five years is witness to the 
progress of this fine investment equity. 
Western Union Telegraph Co. 
The last turning point in Western Union Telegraph Co. affairs 
was in 1910 when, following disposal of a telephone interest and 
accompanying complete rearrangement of operating system, the 
company had all physical property appraised and made up a new 
balance sheet. 
Plant value on that basis was $133,989,000 ending 1910. Addi- 
tions thereto in years through 1926 totaled $128,594,000, and 
during only the five years ended December 31, 1926, a total of 
$38,000,000 was charged against earnings and credited to the 
reserve for depreciation of land lines, these two items together 
hespeaking a thorough-going renovation. 
According to usual public utility practice the sale of securities 
would have provided the expansion funds, but Western Union 
shows only $29,934,000 increase (including sale of $25,000,000 5s 
of 1951 last year) in capital obligations since 1910. (The increase 
was $37,000,000 in 20 years preceding.) Required capital came 
$24,333,000 from proceeds of New York Telephone stock (sold to 
A.T. &T.), $69,347,000 from surplus earnings after dividends and 
the balance from other sources including unexpended reserves 
charged out of earnings. 
Per share of stock Western Union in the 16-year period earned 
$164, and paid $96 in dividends, leaving $68 to plow in. 
The record of expenditures testifies to soundness of the $171 a 
share book value shown at the end of 1926, and corroboration is 
expected in a forthcoming Interstate Commerce Commission valu- 
ation. 
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