JAS. H. OLIPHANT & CO.

$236,004,000 valuation provided $14,780,000 or 6.26% yield. Total
income covered $17,794,000 interest at 4.839% average rate on $412,-771,000
 funded debt and $3,982,000 dividends of 4% on $99,544 -
000 preferred stock with $37,003,000 surplus amounting to 16.6%
on $222,292,000 common stock equity.

Partly thanks to the huge holdings of bonds and stocks, which for
twenty years have never yielded less than $11,000,000 annually or
about 5% upon its stock, this company has earned more than 10%
each year since 1902, and has paid 10% dividends since 1906 excepting
 eighteen months at 8% following a 1914 asset distribution.
Sum total of investment income in a quarter century is $318,560,-000
 and balance of earnings saved after dividends $284,766,000 or
90% thereof. Earnings on the common stock and the amounts contributed
 by investments have been as follows:

Total
1926... . eee 16.6%
PODS cee snares srreat nd 0.5
1924.... .14.3
han... “h.2
1922. 0
1927 99

From Investments
6.7%
67
6.6
7.0
6.3
5.5

Variance from year to year of investment income is notably small.

Security holdings at the close of 1926 consisted of $44,114,000 (par
$58,131,000) bonds and stocks of affiliated companies, $69,998,000
(par $79,222,000) bonds and $89,892,000 (par $71,514,000 and
market over $90,000,000) stocks of standard railroads, and $32,-000,000
 United States Government bonds. Full ownership of Union
Pacific Coal Co. returned $1,750,000 in each of the past two years
and $1,250,000 dividends in each of the two preceding, and half
ownership of Pacific Fruit Express $2,400,000 in each of the past
three years and $4,200,000 in the fourth, together the principal
subsidiaries. Among stocks of other railroads, $22,700,000 in New
York Central, $44,697,000 in Illinois Central including $12,972,000
held indirectly, and $4,420,600 or a 3% interest in Chicago & North
Western are owned. At maturities of Union Pacific bonds J uly 1,
1928 and December 1, 1929, $30,000,000 bonds and $34,564,000
stocks held as collateral will be released and the entire $236,004,
000 of investments becomes free in the treasury. Original reasons
for these holdings are no longer good and conjectures as to disposal
of them are likely to arise. With $55,587,000 cash and Liberty
bonds owned in 1923, Union Pacific sold $20,000,000 bonds of its
own issue for capital expenditures, and with $70,972,000 in the
treasury in 1927 sold $26,835,000 414s to refund 4s, so perhaps
some plans are taking shape.

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