The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1903-07-12
u. S. STEEL PROFITS
Annual Net Earnings Equivalent to Five
u,I......t Total Rond Issue.

Annual Net Earnings Equivalent to rive
Years Interest on Total Bond Issue.
NEW YORK, July 1l.--In view OF the
recent issue of s2OoOoo,oOo, five per cent.
bends, by the United States Steel Cor
poration, that company's statement for
tho six months ending June 80 is OF spe-
cial interest to those who are ever on
the alert to profit by the rule that 1t IS
we'll to buy securities when they are
cheap 1t shows the net earnings Tor
six months, after deducting, each month,
the expenditures for ordinary repairs, re-
newals and maintenance OF plants, also
interest OH bonds and fixed charges OF
subsidiary companies. to be the enormous
sum of $6l SOS 22335; and untitled orders on
hand on July | amounting to 4666.5IS tons.
These figures are pregnant With me eVi-
dence OF past and future prosperity.
From the net earnings or s6l.o0s'2oo, tnn
sum Of s7,3S5,299 Is deducted. OF which
$G,655,5oi is set aside for Depreciation /, alia
Reserve. and ,7s5 for the Sinking Fund
on bonds of subsidiary companies, thus
leaving for bondholders and stockholders
the sum OF $5A,1s2,936.
paid to bondholders $1,000. 900, CThis Is six
months interest on the issue OF s3Sl W.
900 of five per cent. fifty year bonds.
which are quoted on the bond market at
for the Sinking Fund OF the same bonds
$4,000. In addition to this sl7,D9sS9 was
paid Subject to adjustment on account OF
conversion Of preferred stock a fof me ,'eW w
Holders Of st common Stock. After these
payments there still remains undivided
profits Of surplus OF $l7,037,W7.
TO the conservative investor and to
those who have been waiting for the
seml-annual statement, the main point OF
interest lies In ascertalning whether "
gave bX It's net earnings an assurance OF OF
charges on its new issue of 100000 ,0CO
(now quoted on the bond market aa, at at d ~
The annual interest on the total bond
issues of $502.oOo,ooo at 1lve per cent.
amount to s25,2Ooooo., Tho net earnings
for six months, as shown ny tilo STATE
tercst on bonds amounts to s5i,lS29S6, Or.
in other words. 1t being borne In mind
that interest on bonds must be paid be-
fore. dividends on preferred or common,
stock, tho net earnings OF the United
States Steel Corporation for six months
Were sufficient to pay the fixed charges
for full year on III total hond issues us,
ings for the second half year, five times
over. In view of this can, any, reason.
able doubt prevail as TO the ability or
ing in excess Of sle5, 100000 to pay a fixed
charge OF S25.O000O0
1t would be difficult to martial condi-
lions which would reduce tho net earn
ings of this Corporation fully onernalf,
and even then the sum available for, IN
terest would be more, than sullcient 70
pay the interest on all bond issues twice
over. Strikes, competition, general bust,
ness stagnation. which could bring about
a loss In earnings equal to a reduction
OF seventy-hve per cent, would place half
the railroads In the country In the hands
of receivers. And even then an additional
element OF security is possessed by the
Steel Corporation IN Its undivided profits
or surplus to which the semi-annual state
ment shows an addition OF sl7S7o47, q
sum In excess Of six months Interest on
s50o.Coo.00o OF bonds at five per cent,
If 1t were not that railroad securities
have been longer dealt in on the securi-
| " market and are consequently better
| understood by the general public seeking
Investment for capital; i IS safe 70 say
bonds would hot be the bargains they are
/ now. While these bonds are selling arouno
/ So and So and Will pay close on to SIN
per cent, on the Investment, ralroad,s
| whose net earnings cannot compare VIII
| the United States Steel Corporation are
| selling much above par and are yiieldinG
| less than four per cent. on the invest
| ment.