The age-herald., 1901-03-25
L. & N. STOCK IS AGAIN WORTH PAR Quoted at 100 IA on N. Y, Exchange Saturday FIRST TIME IN MANY YEARS Estimated That the Company Is Earn Ing 12 Per cent.--LoeaI Trades
 Have Made Money-A
 Fine Showing.
 
FIRST TIME IN MANY YEARS


 many years, being quoted Saturday at 1OOA. Two or three years ago this stock was down to between 50 and 60, but the general prosperity of the section trav- ersed by it the last two years, and the increased earning capacity of the com | pany has caused the stock to gradually advance until 1t reached par on last 1 Thursday. There has been some local trading in Louisville and Nashville stock recently and It has come to be one of the favorites. It is estimated that the company Is now earning about 12 per cent per annum on its stock, which Is the highest rate 1t has ever earned. Refer ring to the advance in Louisville and Nashville stock the Wall Street Journal says:
 Louisville and Nashville has again crossed par for the first time in many years While some of the recent 'esti- mates of earning capacity put in circula- tion cannot be regarded as other than absurd, 1t cannot be denied that the | stock is fairly worth par on its merits.
 Last year Louisville and Nashville earned gross about S27, GOO and in the | l creased this by S627 663. In all probability | it will show gross earnings of S2S,5OO,OOo, or thereabouts. The question Is, what amount of net earnings this represents I for the stock It is, however, well to 1 note that gross earnings of BPS, 800, 900 per annum represent a very high level for Louisville and Nashville, and one on the continuance of which 1t Is not safe to count
 However, we start with the assump- ton of BPS, ,500,O0O gross earnings, from a round 5000 miles of road
 Maintenance of Way.
 Maintenance of way on Louisville and Nashville cannot be safely figured much below 5000 per mile of road for the com pany has a freight density of over ESQ., | 900 ton-miles per mile and a passenger density of 74,O0O passenger miles per mile. l Our allowance is, moreover, borne out by the companys own report. Last year maintenance of way absorbed 3,950S3S, or s1313 per mile, of which the company claimed about $1,00O,OOO as expenditures | for improvements and betterments charg- I ed to operations. Allowing all this claim to stand, the regular maintenance ex- penditures would amount to 5000 per mile. We may, therefore, properly ap- propriate $3,OO0,O0O for maintenance of way.
 Reckoning requirements for mainte- nance on the arbitrary basis we usually | adopt for rough estimates we have be- tween $2,5O0, GOO and $3,OO0000 as the sum l probably necessary to keep inventory in tact and in good order. In these days 1t | is unsafe to cut down allowances on equipment to figures that would have been safe enough five years ago when ma terials were much cheaper than they are now. Consequently, for the sake of con servatism we may take the requirement | for maintenance of equipment at 8, 900, | coo in round figures.
 General expenses at $1, 100, 600 will prob- ably be a safe allowance in present cir cumstances
 l Other Expenses. | There remain expenses falling under the head of conducting transportation. The only possible measure of these Is their ratio to gross earnings. It is true that this ratio is necessarily affected by cir- cumstances such as a change in average ton mile revenue. The ratio will tend to vary inversely to these changes, If any occur. Assuming, however, that ton mile revenue Is constant the main factor in determining the ratio is the train load and here also ratio tends to vary inverse ly to load.
 Last year the company spent 35 per cent. of gross earnings in conducting transportation, with an average trair mile revenue of $1.67 Assuming that an increase in train load has been secured this year it is probably safe to say thai 8 1-3 per cent. of gross earnings will meet these expenses. Thus on gross earn ings of BPS, 900 the conducting trans portation requirements would be at 33 l.; per cent, $9,5O000O. Consequently oper- ating account would stand as follows: Maint of way ........ .$3 100000
 Maint of equipment .. .. 100000
 Cond. transportation .... 9,500,000
 General expense 1,100,000
 Total expense ...... ...... 16,6o0.OOC
 Net earnings .... ...... ...... .$11, 300, ,00C
 Fixed Charges.
 s'Now Inc connDanU has 6vad obo r,ae