Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-11-06
OCEAN CABLE SERVICE.
Interesting Comparisons Between Ma
rine Telegraph Companies.
INVESTMENTS UNDER THE OCEAN.
capitalization, Earnings and Durability
as Speculation.
PARALLEL BETWEEN TWO BIG SYSTEMS

The ocean is full of cables and the stock
market is we'll supplied with cable stocks
but the investing public do not, as rule
take much interest in either The earlier
companies did great harm both to them
selves and to telegraphic finance by the
extravagant capitalization they started
with. 1t is that which it to blame for the
comparatively meager dividends they pay,
says the London Financial Times. On a
moderate bona fde capital they could have
made very liberal returns to their share
holders and cable shares would have stood
in much better credit with investors. In
| later enterprises these errors have been cor
rected and cable systems, prudently admin
istered, have been enabled to exhibit their
real earning power. But the fairly capital
| lied shares are still in small minority
| compared with the watered ones.
In the official list of the Stock Exchange
there are 16 or II companies quoted and OF
the whole number only three or four have
escaped the evil of oyer-fnancing. The
Indo-Enropean has always been conducted
on conservative lines, with the result that
it is now very solid institution, able to
serve the public we'll and at the same time
treat its shareholders handsomely. They
can always count on it for 10 per cent divi-
dends, and the shares in consequence COM
mand substantial premium. With 925
paid on them they have market value Of
e42, the yield on which is about 81 per
cent yer annum.
Growth of the Great Northern.
Another of the select circles of cable
shares which can be regarded as invest
ments is Great Northern, a competitor of
the European. Although it is for
eign institution. its headquarters being at
Copenhagen, its business is SO well con-
Quoted and its dividends are so invariably
satisfactory that it holds frst-class posi-
tion both here and on the continent. Re-
Gently it has paid ON an average IN per cent
per annum and the shares have for years
been steadily appreciating. From 13 they
moved up with the growth of the dividend
first to 10, then to II, and after resting there
awhile they got now to 10. Foreign as
they are, they are one of the highest priced
of cable stocks. the yield ON their present
quotation being under AZ per cent. 1t has
taken them, however, nearly quarter of
century to work up to this high level
A very interesting comparison may be
drawn between them and the youngest cable
cial. The two systems are as widely sep
arated as they could possibly be, the one
operating in the far East and the other in
the far West; nevertheless, they have many
points of similarity. In extent they match
each other very closely, the total mileage of
the Great North lines being 6, ITO miles,
while the Commercial measures, with its
land connections, $685. miles. Financially,
they also present some curious parallels,
their capitalization being as nearly as possi-
BILE alike, and their earnings, both gross and
net, being very little apart.
Interesting Comparative Figures.
In 1890 the Great Northern telegraph sys-
TEN had gross receipts of s., 400. 900, equal to
S227 per mile of cable. In the same year the
Commercial Cable Company earned 81, 932,-
600, or at the rate of $27S per mile of cable.
The net earnings were respectively 81. .037,-
600 for the Grand Northern and 81, ,112,6SO
for the Commercial Cable. In fixed charges
the older company has somewhat the ad-
vantage Of its Junior, having been able to
borrow at per cent as against 6 per cent,
which the Commercial Company has to pay
The amount of Great Northern debentures
is also very small-e245, ,0OO-and it is be-
ing steadily reduced by annual redemption.
The same policy is being pursued even more
energetically by the Commercial Cable
Company. 1t started with debenture capi-
tai of about $1,000, 900, which has already
been reduced by more than one-half
In 1890 bonds were redeemed to the
amount of 5000, 900, and at the beginning of
the present year another 5000, 200 was paid
off This reduced the outstanding sum to
81 600, 900, or $780, ,0OO At least another
5000, 600 will be redeemed at the end of the
year, bringing down the debenture debt of
the Commercial Company to about the same
level as that of the Great Northern. In re-
spect of capital stock and reserve the two
undertakings are practically on all fours.
The Great Northern 5000 miles of cable is
capitalized at 81, 5000 and has reserve
fund behind it of fully $4,000, 900. The
Commercial Company has capital of ST.
ZIG, 900, and reserve Of S2, 4SO, 900, or half
a million sterling
One of the Curiosities in Finance.
The parallel between these two great
cable systems is a curiosity in finance. 1t
runs step by step through everything down
to the very dividends they pay. Last year
the Great Northern Company distributed to
its shareholders II shilling 2 pence per
share making about tx per sent As ia