STUDIES IN SECURITIES

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worth far below the excessive figures on the New Haven books,
have possibilities. New York, Ontario & Western (book value
$13,108,000) is paying a small occasional return, 1% in January
this vear. The steamship companies are less a problem.

Ending 1926 New Haven showed a $9,294,000 deficit to corporate
surplus, but partly due to merger of Central New England Ry.
the books in 1927 were made to balance. Road and equipment
account admittedly is stated at ficures under real valuation.

New Haven is not near dividends but a margin of safety over
fixed charges has been re-established, a sound treasury position
has been restored, critical financing has been accomplished, operating
 efficiency obtains again, and the salvage value from a bulk
of extravagantly made outside investments will be larger than
seemed likely a few years ago; and it is in these factors that New
Haven’s attractiveness as a low-priced non-dividend railroad speculation
 is found.

Norfolk & Western Ry.

Specialization in the haul of soft coal rewards the Norfolk & Western
 Ry. with an earning capacity in 1926 more than two and a
half times the 10% dividends paid. Coal traffic of the company
exceeds 75% of the total and in twenty years has developed from
six to forty million tons. Behind this are the cheaply mineable
deposits estimated at 500 years’ supply in the West Virginia district
 wherein the Norfolk & Western taps the Pocahontas, Tug
River, Thacker, and other fields. There are the smokeless highvolatile
 Pocahontas coal, which being uniquely fit for bunkering
goes mostly to Hampton Roads for export, and the ordinary gas
coal, which normally moves rather toward the Great Lakes and
has a great future with Western industry. The 2241 miles of Norfolk
 & Western lines deliver to tidewater and to the Pennsylvania
R. R. System north at Hagerstown and west at Columbus and
(Yneinnati.

Average 287-mile freight haul, which is surpassed only on half
a dozen railroads, and heavy trainloads make for a low ratio of
operating expense to revenue, as follows:

1926. .........59.20%
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024... TRO
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1998,0us ss vn TSG
08L eB
1917 oneness 028
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