New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-05-04
LAKE SHORE PLUM
FOR THE CENTRAL
Earnings of Subsidiary
Company High-Fund-
ed Debt Low.

Wnen the new 1Ork Ientrai pioPvocu
last year to merge with itself the Lake
Shore & Michigan Southern there were
plenty OF people who did not see much
more I'm the plan than a mere bookkeep-
Ing transaction. The Central owned by
far the greater part of the Lake Shores
stock. and through tho directors IL
elected voted whatever dividends seemed
to be realized that the Lake Shore had
only some sl69 600 of funded debt. with
over 1iO0 miles OF one of the best roads
In the country. and that the Central had
already all the funded debt IL could COM
fortably carry. the reasons for the merger
became palmer. 1t was evident that the
Central, at comparatively small cost, was
to strengthen its credit to very con-
siderable degree
Last week il was announced that more
than IS per cent OF the holders of the
bonds which the Central gave for IT'S
holdings of Lake Shore stock had con-
scented to tho terms of the merger. and
that 1t was therefore to become operative.
There are still H,773 shares OF the Lake
Shore outstanding. For these an oHer
has been made Of five shares OF Central
for every one Of Lake Shore. Three ap-
praisals made early this year OF Lake
Shore stock resulted in an average OF
81. 237 a share, so that there is more than
little doubt that the minority STOCK
holders will cheerfully give up their noiu-
ings for the price offered.
AS an Garner the Lake Shore Is almost
in a class by itself. Since the company
was organized. in 1859, as a consohda-
ton OF four companies II has PAID All
average In dividends TO Its stockhoioers
of more than IA per cent year. Ihe
total in dividends for the forty-fve years
was, in fact, Siola per cent.
In the last nine years alone the average
net earnings on the stock have been VS.
per cent year. and they are constantly
increasing. The record Is as foliows'
1896, 9.03 per cent; 1906. l3n; 1877 HsS'
1903. I5.5e; 1909, 1856; 1910 @.n; 19h' 800
and 1912, 33.S3 The net earnings per miie
for twenty-five years past have aVeraseu
Sc. 400 and the operating ratio, or the
percentage of expenses TO gross earnings
has averaged 81. 40. In only three of those
twenty-five years has the operating ralio
risen above 20. and twice 1t has been pc
low 65. In 1912 it was e5.i6. Meanwhiie
the percentage of fixed charges 10 sross
income has steadily decreased ihsteau
OF increasing, as is often the case IN RAN
road financing. In 1895 fixed charges tooh
I'm 70 No ner cent of gross income; in lsl2
they were only 1913.
l,oUf Of
freisbt traffic Is made up OF the producls
or mines-ores and coal-and mahuiaot-
ur.s comprise a half OF the refndihuei'
Tho company itself and through It's SUD
salaries owns coal lands and ore docAs
OF considerable value.
In all. the Lake Shore operates l'o'-
miles OF road. OF which something over
foo make I'D its main line from Buffalo
% Chicago. In its own name are S5s
miles and proprietary roads. all OF ""oSo
stock belongs to it. have go miles more.
Not only is the road double racheu
throughout but IN five OF the SIX states
through which It operates It mas ootu
third and fourth tracks.
Among the Lake Shores Important
holdings OF other roads are the roiio"-
ing. New York, Chicago 81 LOUIS
s. 10000 common. $4,000 second pre-
ferred and s.. 10000 first preferred; Plus
burg G. Lake Erie. sl4s942J0; Cleveland
Cincinnati. Chicago & St. LOUIS s'''-V'
IN. Lake Erie & Western, So'i".Vo' coin-
mon and s.. 10000 preferred. IN each case
the stock ownership carried control Win
q The Lake Shore is also the owner OF
e. oe5 ooo Reading first preferred stock slf'-
OK ooo second preferred and slo'oo2oo
common. which It acquired from tno
P.nnsylvania-Va Vanderbilt interests me
po,,,more &, Ohio owns a similar amount