MN 
BurLLeTiN No. 20 
modal ratio after reaching the “peak” of 495 in 1921 declined to .480 
by 1924. 
SUMMARY OF THE LONG TERM DEBT RATIO 
The typical ratio of Long Term Debt to Total Equities for the 
200 public utility companies studied is .481 when taken for all the 
companies in the entire United States. Forty-four per cent of the 
cases were located in three class intervals out of thirteen, The ratio 
varies widely according to the groups in which the data were analyzed. 
When these same data were broken down into different groups, the 
variations in financing with funded obligations were brought out. Those 
companies in the East and South obtained $ 48 of each dollar of their 
capital from bonded debt. In the Middle West the typical figure was 
$.47, and in the West it was $ 40. Clearly, the companies in the West 
do not rely on bonds to the same extent as companies in other sections 
of the country. Further, the ratios of the East and West were less 
typical of their distributions than those of the Middle West and South. 
The analysis by size of company showed that larger companies 
finance with larger proportions of long term debt. The companies with 
5-9 millions of equities had a modal ratio of 41, those with 10-49 
millions had a ratio of 48, and those companies with more than 50 
millions of equities had a modal ratio of .53. 
Gas and Electric companies obtain approximately 51 per cent of 
their capital requirements from bonds, whereas Traction Companies 
use bonds to the extent of 42 per cent only. Midway between these 
are the Holding Companies with a ratio of .47. 
From 1917 to 1921 this ratio increased from .44 to .50, and then 
declined to .48 in 1924. These figures appear quite in accordance with 
the well known difficulty which utilities had in financing themselves 
from 1917 to 1921. Conditions for a time forced them to use bonds, 
and then, after the readjustment of industry and credit conditions, 
they were able to use stocks more freely instead of bonds.