Studies in securities

Bibliographic data

Monograph

Identifikator:: 1757542078

URN:: urn:nbn:de:zbw-retromon-134903

Document type:: Monograph

Title:: Studies in securities

Edition:: Revised

Place of publication:: New York

Publisher:: Jas. J. Oliphant & Co.

Year of publication:: 1927

Scope:: 81 S.

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Union Pacific R.R.

Collection:: Economics Books

STUDIES IN SECURITIES ie, ta More important than these investments of demonstrably sound value upward of $100 a share including $20 equivalent in affiliated companies is the equity in the railroad for Union Pacific common stock. The system of 9,647 miles reaches into the developing Pa- cific Northwest and Southwest and to and from Omaha or Kansas City has an average 380-mile haul of freight as a basis for earning power. Management is able and in 1926 reduced the expense ratio after six years above 70% down to 68.59% bringing the pre-war ratio of 60% or less nearer into view. As an investment, Union Pacific common compares favorably with not a few bonds, in particular as it has the elements for specula- tive advantage to come. United States Steel Corporation The common stock of the United States Steel Corporation, which in 1901 was considered to have no equity at all in tangible assets and indeed was only 30% covered by the par value of securities of the consolidating companies, in 1927 received a 40% stock dividend, which capitalized less than 20% of the surplus earnings meanwhile accumulated. Thereby, the management re- sponsible for making the world’s foremost enterprise what it is indicated a belief at last in the fitness of the property to give the owners greater returns, having stated a year previous that a stock dividend when paid ‘‘would add to the amount of cash dividends on common stock if and when declared, and might possibly, in times of depression, interrupt their continuity.’’ Distribution of $203,321,000 additional eommon stock, bringing to $711,623,500 the total issue, is from a surplus, undivided and appropriated, of $823,502,000 beginning this year. Allowing for the $25,000,000 provided at organization, such surplus is $206,752,- 900 less than balance of earnings shown in 2534 years. This amount was written off in reduction of property investment ac- count, against which in addition $722,026,000 balance in reserves was built up. Property was carried at $1,298,000,000 in 1901 with 9,425,000 tons ingot capacity, while following $1,525,000,000 actual expenditures the valuation was $1,667,000,000 in 1926 with 23,177 - 000 tons ingot capacity. Taking to be in fact segregated surplus the $81,183,000 in sundry reserves other than for insurance and the $50,143,000 inventory reserves, the total equity on the basis of a highly conservative plant valuation was $1,463,162,000 at De- cember 31 last, or $205 a share for the newly increased common Stock. 77]

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