JAS. H. OLIPHANT & CO. 
paid indirectly on $8,600,000 mortgages of subsidiary warehouse 
companies. Any reasonable profit margin covers this total eapi- 
tal levy with ample to spare. 
Concern of the management, since taking hold in the fiftieth 
year of this oldest mail order house to deal with the effects of 
$17,743,000 losses in 1920-21, was primarily to expand sales. The 
business increased as follows : 
1926 
1925 
1924 
1923 
1922 
.$183,801,000 
170,593,000 
150,045,000 
123,702,000 
84.739.000 
It was made known in 1926 that effort would be directed rather 
to improvement of net earnings thenceforth. 
Five years’ aggregate sales were $712,879,000 and net earnings 
shown after taxes were $41,163,000 or 5.8% of the gross. After 
paying dividends, including in 1925 the last of $4,754,000 pre- 
ferred and class A accumulations, there remained $29,772,000 for 
development of the company. New plants were opened at Oak- 
land in 1924, and Baltimore (cost $2,000,000) in 1925, and 
additions made at Fort Worth in 1924, Kansas City (capacity in- 
creased 25%) and St. Paul in 1925, and Baltimore (new plant en- 
larged 40%) and Oakland (cost $550,000) in 1926. Despite the 
outlay on property, no bank loans were shown at December 31, 1922 
to 1926 inclusive, and $24,000,000 was added since 1921 to working 
capital. Resort to financing was only when in 1926 $5,750,000 
5% bonds were sold for subsidiary account. With the treasury 
replenished from the proceeds and with $1,224,000 sinking fund the 
$4,250,000 7% preferred stock issue was retired at 115 at the year- 
end. The finish of rehabilitation work was signified by beginning 
common dividends at $4 rate in November last. 
Record of earnings for the common stock is $2.05 a share in 1922, 
$4.40 in 1923, $6.20 in 1924, $8.05 in 1925, and $6.25 in 1926. 
These results were after $500,000, equal to 44 cents per common 
share, appropriations to sinking fund and surplus in years before 
1926, and about $245,000, equal to 21 cents per common share, pay- 
ment of preferred dividends in every year, both of which charges 
are now eliminated. Thus real earnings of Montgomery Ward were 
nearly $2.25 a share less in 1926 than in 1925, attributed officially 
to declining commodity prices, greater proportion of small-profit 
merchandise sales, and special expenses of opening the Baltimore 
plant and of increasing catalogue circulation. Unofficially, the 
automobile tire sales, perhaps $30,000,000 in amount, are believed 
to have at best contributed nothing to net, although the strain of 
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