STUDIES IN SECURITIES
pany. Adding the equities in undistributed earnings of the roads
to be leased, the results would become per share:
1928. . ke... 519.70 102%... 320.70
1025... = 18.15 1907 seen 112105
LOS. a 0.75 a SE a
These figures do not include the equities in 50% control of Pitts-
burgh & Lake Erie R. R., 25% or more interest in Reading Co., or
in considerable other property not promising much greater earn-
ings contribution soon.
Giving effect to leases proposed, the New York Central will be
responsible for approximately $1,150,000,000 publicly held obliga-
tions having a fixed charge on earnings, and $421,584,000 stock as
increased by 109% subscription in 1927 becomes 27% of capital
on this basis. The company proper has improved the ratio from
25% in 1920 to nearly 389% in 1927 and has remaining some
$62,000,000 stock authorized for sale on occasion to replace ma-
turing debt. Excluding equipment notes the maturities of New
York Central, Big Four, and Michigan Central are $73,834,000
prior to 1930 and $128,356,000 in the next five years. An anchor
to windward is the maturity between 1990 and 2361 of a total
$502,359,000 bonds averaging only 4.018% interest rate. Under
a policy of substantial financing from earnings the four lines
in 1926 paid the public only 35% of the amount available for
common dividends and retained $49,528,000 surplus and in the
six years paid 429% and had left over $218,000,000 or $57 a share
if applied to New York Central stock.
Dividend record of New York Central R. R. and the predecessor
company has been uninterrupted since 1870. In 1923 the 5% rate
was raised to 7% and in 1927 to 8%, with which new dividend the
mid-1927 offering of 10% new stock was facilitated. The shares of
New York Central R. R. represent a tenth of the entire railroad
business and a service indispensable to eight states with half of
the country’s population producing a quarter of farm crops, half of
mine products, and two-thirds of all manufactures. Under the cir-
cumstances the stock at 150 level is by no means over-valued.
New York, New Haven & Hartford R. R.
The surplus after charges for New York, New Haven & Hartford
R. R. in 1926 was $8,243,000 compared with $7,418,000 in 1925,
$2,999,000 in 1924, deficit of $2,917,000 in 1923, of $4,911,000 in
1922 and $15,327,000 in 1921, the first year of private control
after the period of Governmental operation and guaranty. Thanks
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