The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1903-05-28

The very great strength recently of the
preferred stock OF the National Railroad
of Mexico is explained by the announce
ment made by Speyer C Co.. as repre-
senting the Mexican National voting
trust, of the agreement made by them
with the Mexican government concern
ing the affairs of the company. The
common stock of the National Railroad
of Mexico is divided into two classes
of stock. two-thirds of which is to be
known as second preferred stock and the
remaining one-third as deferred stock.
and the Mexican government has agreed
to purchase very large amount of the
several classes OF the capital stock OF
the company. including as part of the
shares purchased the total issue of the
newly created deferred shares. The gov
eminent also transfers to the railroad
company its holdings of the debenture
stock OF the Interoceanic Railway of
Mexico, by which acquisition the rail-
road company secures what it has so
long wanted, namely, an outlet to the
Gulf of Mexico. The Mexican govern
ment also agrees that for twenty years
1t will grant to the railroad company
a concession of such nature as to prevent
the construction of any line in the most
important part of Mexico which might
compete with the Mexican National
Railroad for through traffic with the
United States. There are good reasons
for believing, moreover, that the Mexi-
can government will. as the possessor
of a large property interest in the rail-
road company, allow the company to col
Iect as freight traffic on the Same basis
as that upon which the Mexican govern
ment now collects customs duties, name
ly, upon a basis very nearly approx
mating the gold par. 1t is, therefore,
confidently expected that at no very dis
tant date dividends will be paid upon
what will be known as the first pre-
ferred stock OF the railway company.
that is to say. upon the preferred stock
as at present constituted. The present
earnings Of the company. indeed. are at
a rate which would allow this payment
anyway.
Railroad earnings now coming TO hand
from various parts OF the country for
April and for the first three weeks in
May show no falling off in traffic re-
ceipts from the preceding months, while
as compared with a year ago gains are
reported without important exception.
OF the roads reporting for April gross
earnings show a gain of Is per cent
operating expenses a gain of nearly 10
per cent, and net earnings a gain of
about II per cent. From July l net
earnings show a gain OF over per cent.
This is a striking and noteworthy gain
In view of the large expenditures made
from earnings in the year and the in
creased cost of materials, supplies, and
labor. There is certainly nothing in the
railroad situation in this country that
warrants pessimism ameng investors,
and, even If there should be reaction
IN business from the present intense ac-
tivity, the railroads OF the United
States would not be forced TO cut their
dividends unless the reaction ran into
a panic of long duration.
There have been many reports cir
crlsted throughout the paper trade
within the last two weeks Of the great
curtailment of production by the Inter
national Paper Company and by many
Independent mills. due to the great