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BuLLerin No. 20 
increasing, there has been a decrease of the percentage of cases grouped 
about the mode. That is, a few of the companies have increased their 
surplus and reserves ratio to a greater extent than the typical company. 
Consequently, although the modal ratio has increased, the percentage of 
concentration has decreased, due to the still greater increase of the 
ratios in a few of these companies above the modal average. 
SUMMARY OF THE SURPLUS AND RESERVES RATIO 
In the United States as a whole the typical utility company has a 
Surplus and Reserve item in its balance sheet which constitutes .071 of 
its Total Equities. Companies in the Middle West and West have 
ratios of .0S, those in the East have a ratio of .07 and those in the 
South a ratio of .03. The very low ratio of surplus in the South is 
highly representative of the companies on which it is based ; 79 per cent 
of the cases were concentrated about the mode in three out of 22 class 
intervals. 
Typical ratios of Surplus and Reserves for companies of 5-9 mil- 
lions and 10-49 millions of equities are .05. Companies with 50 millions 
of equities and over have a higher proportion of Total Equities in 
Surplus and Reserve, namely, .08. Furthermore, the largest group of 
companies shows practically no deficits. 
In the analysis by operative function of the companies, the Trac- 
tion Companies have the highest modal ratio of 08 (.077) with ap- 
proximately .05 for both Gas and Electric, and Holding. However, in 
contrast to this is the great percentage of negative ratios in Traction 
Companies, wherein 13 per cent of the cases had deficits instead of 
surplus. 
When analyzed by selected years, the modal ratios are almost con- 
stant from 1917 to 1921, ranging from .047 to 051, but in 1924 the 
ratio jumped to .077. This large increase in this ratio is easily ac- 
counted for by the reaction and recovery of utility company profits 
following the decline of business in 1921 and 1922 with its accompany- 
ing fall of operating costs due to reduced commodity prices.