STUDIES IN SECURITIES 
I nT aC Te 
Pe 2 es ee 
Ce gore 
Flat oi 
a 
At 79% Erie’s operating expense ratio presents opportunity for 
savings; a 5% reduction would add $4 to common share earnings. 
Forecast of Erie earnings, worked out in the interest of Chesa- 
peake & Ohio Ry., expects on the common stock as probably to be 
increased better than $6.60 share earnings in 1927, $8.10 in 1928, 
$9.40 in 1929, $10.60 in 1930, and $12.00 in 1931, assuming $5,304,- 
000 annual coal subsidiary dividends or $3.50 a share equivalent. 
Controlling stock in Erie is now held in favor of ultimate grouping 
with others as in the attempted Nickel Plate merger but an ex- 
change of shares or lease is unlikely for the time being. 
Resemblance of the present Erie R. R. to the Southern Ry. of a 
few years ago is surely not remote. Plenty of traffic, prospect of 
carrying it more cheaply, ability to raise new capital for better- 
ments, current earnings sufficient for preferred dividend payments, 
make Erie stocks attractive for speculation. 
General Electric Co. 
To an enviable record in fifteen years before, General Electric Co. 
added a remarkable showing in the war and the immediately post- 
war period, and in the past four years, 1923-26 of prosperity, 
made new records in earning power, 
From 1910-15 earnings ranged from 11.10% to 16.25% and the 
lowest figure since 1902 was 7.40% in 1908. Cash rate of 8% in 
dividends was maintained, supplemented by a 809% distribution 
in stock in 1912. 
Billings expanded from $90,467,000 in 1914 to $275,758,000 in 1920 
and inventories from $29,292,000 to $118,109,000, successfully fi- 
nanced by a $37,000,000 increase in stock, $23,000,000 increase in 
funded debt, and $45,000,000 bank borrowings. Similar flexibility 
was shown in contraction in 1921 when billings decreased 20%, 
bank loans were paid off, and 13% earned on the stock. War 
profits and prudent financing resulted in $63,000,000 cash and 
(fovernment securities at the end of that severe year. 
Thus the way was prepared for full participation in the prosperity 
of the past four vears. viz: 
1926. . 
1925. . 
1924. . 
1923. 
1922 
Billings 
$326,974,000 
290,290,000 
299,252,000 
271,310,000 
200.194.000 
*Figured on basis of present no par 
changed for $100 par value in May, 1926. 
{391 
Net Income 
$46,672,000 
38,641,000 
39,236,000 
33,525,000 
26.231.000 
*Surplus 
per Share 
$6.14 
5.12 
5.28 
4.60 
3.79 
shares of which four were ex-