New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-08-23

with ownership, management. regula-
ton and division of profits are likely
to increase, rather than decrease, from
now on. Already shipping is taxed to
the utmost, and one cannot blame the
British government if the taxes are
increased, especially IN view of the
fact that most of the profit is made
out of carrying goods for them. 1t is
remarkable that when the company
went into receivership. only 10000
tors out of the total of 1,425,000 tons
should come under the control of the
receiver; it was unable to lay hands
on the rest, because they constituted
foreign property. in spite Of the fact
that the major part of the stocks was
held in the United States. So long
as this company has only the stock
holding rights and not property rights
it is difficult to see how a successful
reorganization is possible.
Vague Capitalization.
The capitalization of this company
is on no known basis. There is no
other company of this kind in the
world; on the basis of tonnage the
l. NJ. NJ. Is heavily capitalized.
The following figures of the tonnage
and capital of a few British companies
may be found instructive:
British India. $4,000 tons, capital
and debentures, G3,314,4OO; p. & o.,
$4,000 tons, capital and debentures,
e6,137,000 Call passenger ships); Gu
nard Line, 10000 tons, capital and
debentures. sl,5OO,OOO call passenger
and fast ships); Furness-W Witty, $685.
600 tons, capital and debentures, 49,
100000.
The l. NJ. NJ. has 1,45O,000 tons, of
which 100000 tons are freighters, and
even after the proposed reduction of
the bonded debt it will have a capital
and bonded debt of sl4O,OO0,0OO, or
nearly s29,OOO,OOO. Shipping compa-
MES in other parts of the world greatly
reduce their cost per ton with each
year. In other words, they add to their
tonnage from profits and thus reduce
the cost per ton of the feet. In the
case of the l. NJ. NJ. this has not hap
pened to a large extent, because the
property was increased by the pur-
chase of stock. Consequently, the cost
per ton is the largest known in ship
ping history
Conclusions.
Almost since its inception the capital
and indebtedness have been so large as
not to allow for any chance of divir
dends. When the war stops we will
return TO the old state of affairs, unless
the capital is reduced to the basis of
that Of big shipping companies of Eng
land or Germany. A careful analysis
of the known figures shows that this
company will be on a paying basis
only if share values are reduced by
one-half.
The basis for stock and bond values
at present seems to be altogether war
earnings; in other words, it Is nothing
but a gamble on the duration of the
war. BY all means, let those who wish
TO speculate on that basis do so; but
there are many other speculations IN
the market which are safer and which
also have the thrill of gambling. We
should consider the question from an
investment point of view. So far the
bondholders are in a safe position.
and the new plan-if the management
is really able to get the "cash" they
promise to give-justifes small
premium on the bonds, as the bond
holders are getting their par and the
per cent defaulted dividend. But
there is no normally inducing justiii-
cation for the advances of the pre-
ferred or common stocks.
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