STUDIES IN SECURITIES

Tlinois Central R. R.

5
Eats

With the Governor of Illinois ex-officio a member of the directorate,
the Illinois Central R. R. in the careful character of a semi-public
institution has held financial success and the confidence of stockholders.
 The common stock has stood in the investment class for
generations while others have come in and dropped out. Aftermath
 of the war did not bring down the price as low as 80; and in
the years 1901 to 1912 the range was between 184 in 1906 and 120
in 1912, although the dividend was 7%, same as now.

Payment of dividends has been uninterrupted since 1860, averaging
 6.84% during these sixty-seven years. Long sustained earning
 capacity goes without saying. For ten years ending 1917 net
earnings were $8,740,000 average or just 8% on $109,000,000 common
 stock, and less than 6% was earned in only one year of the
decade, 1911-12 with 3%. Coming through the Government operation
 years 1918 to 1920 with $13,000,000 added to surplus after
dividends and sinking fund requirements, Illinois Central showed
the following earnings on the common :
1926. 300 2A 08 10
L028. eens 0.328 A022. vei 143
1924 . | gh 1921... 28

Between 1921 and 1927 funded debt was increased from $264,963,-000
 to $367,208,000 but, thanks to sale at par of $34,145,000 69%
preferred stock convertible into common and $11,005,000 common
stock, the proportion of stock has slightly improved from 29% to
30% of total capital. Ending 1926 there were outstanding $367,-208,000
 funded debt, $25,268,000 preferred stock ($8,881,000 having
 been converted) and $129,181,000 common stock. A good part
of proceeds from stock financing were devoted to terminal improvement
 in Chicago and electrification of suburban lines and
so will not bring immediate return. Upon completion of electrification
 work in 1926, however, the company found that stimulus
 to residential development and traffic was already considerable.
 In 1908 Illinois Central had sold $13,898,000 and in 1901
and 1902 $35,040,000 common stock at par and at the earlier date
used the funds for double-tracking the line from Chicago to New
Orleans.

So long as the Mississippi Valley continues fertile, Illinois Central
is likely to prosper, while there are expansion possibilities in the
arm that runs through Iowa to the South Dakota and Nebraska
borders, and currently over $1 a share for Illinois Central stock
Hos untaken in the earnings of the fully owned Central of Georgia
y.

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