New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-10-08
OTHER SIDE OF
THE WAR PROFIT
South American Corpora
tiOns Suffer Loss of In
come; Securities Fall.

Shares Of South American corpora
lions listed on the London Stock TX
change have suffered severe declines
since the outbreak Of the war in Eu-
rope. Most of these securities are
little known in the United States. but
under ordinary circumstances there is
a good investment market for them in
England Information concerning the
affairs Of some Of the companies whose
securities have Jared badly is contained
in report from Special Agent Fred
erick NJ. Halsey at London, issued by
the Bureau of Domestic and Foreign
Commerce at Washington.
Ordinary stock of the Central Uru-
quay Railroad of Nontevideo, for in
stance. has declined sensationally
owing to the suspension Of dividends
since the beginning Of the war. The
stock sold at IA in 1912. and at 1861
during 1913, in which year dividend
of 6a per cent was paid, but the pres
ent quotation is not far from SO.
The railroad is about one thousand
miles in length, including several ex-
tensions, and is the principal CONNER
cial highway in the Republic OF
Uruguay. In normal times the system
earns about $4,000, 900 gross year, but
1el4-'l5 receipts dropped to s4,eOO,OOo,
and there was little recovery in the
wear 1875. The company mas
50 900 900 of ordinary stock outstand-
ing. c.t
Preference shares of the Peruvian
Corporation, which are more or Tess
speculative. have declined from o4ts IN
19l2 70 about "a. The ordinary shares
sell at about Al, and are Of value only
because they carry the controlling IN
terest in the corporation. The report
states that:
The Peruvian Corporation was formed 10
1890 in the interest OF II holders Oh '"'
f5l,423. 1870 bonds OF the EepupIic Oh Feru'
the republic having defaulted on these obi
cations principally on account OF the war
Sjtb Chile. which war cost Peru its vazt
nitrate deposits. The Peruvian Norpoia
tion took over, among other assets, and
aoreed 10 complete the construction Of, a
number of railway lines, and was granted
the right of free navigation on Lake iitl-
caca. The government also turned over 70
the CORPORATION 5000, 600 tons OF guano ano
agreed to pay the sum of $4,000 per an
mum 10 the corporation until the year ls-S'
The annuities are secured by the customs
reeeipts of the port of Callao. Since the
var pavments of portions Of this annuity
have been deferred.
The present Capitalization OF the corpo-
ration consists Of approximately fi,9oOooo
of an original issue of s6,00o.oOO mortgage
sinking fund bonds, on which interest Is
paid at the rate OF TO 6 per cent, IN ac-
cordance with yearly profits fI.oOO,oVV :
per cent cumulative preference shares. ana
&. OO0, 900 ordinary shares.
Dividends at the rate of eis per cent per
annum were paid on the preference shares
during the years 1911 10 1914, Inclusive
In 1915 the corporations earnings were so
greatly reduced that only one-fourth OF l
per cent was paid. The gross revenues
from the operation of railways and steam
ers for the year l914-l5 was only S,SOi,ios
Peruvian soles (S4041,515). as compared
with 1896, 249 soles (S6.003,455) in 1919
IA Likewise net receipts declined from
45l6Il1 soles (s2,l97.765) 10 2,6S4,Slo
soles Isl .9sg, 930). Gross receipts for 1910
10 were 9,763,i9 soies tsi.I5l.iOol. =
At the present date there is rproxt-
r,s.elv 90 ner cent in back dividends due
and unpaid on the preference shares. The
ordinary shares are not likely to obtain
any dividends for nany years to come
Traffic in Brazil Suffers.
Railways in Brazil have likewise suf-
fered loss OF earnings, and their Sc
curties have declined. Mr.. Halsey re-
ports that:
Befo-e the war tine Great Western OF
Brazil Railway, operating over 1000 miles
Of main track. with the city o; Pernambueo
a. ~ principal base. enjoyed considerable
prosperity. It's gross receipts FOR the year
iglg reached the total Of sS.elS,00O; in
1gl. Il fell of 10 s3,llq,425, and In 1913
there was further decline TO s2,5O6,20O.
Dividends ut the rate OF per cent were
maid on the preference and ordinary shares
for many years prior to 1914. The ordi-
nary dividend was passed in 1914. and IN
1918 the preference dividend WIS likewise
passed There is outstanding at the pres-
ent time s3O6, ESQ permanent per cent
debenture stock. 1851 400 per cent de-
bentures, 81 100000 preference shares and
g1.25O, 900 ordinary shares. The per cent
debentures sold at sSI4 during 1918 As
of July q, 1914. he price was y ard the
present price is 69A. The per cent de-
benture stock has declined in price from
1873 TO l01M the preference shares, from
fl2. par $40 share. in 1913. to f'is. The
ordinary shares, par $40. which sold at Ell
in 1913, have sold down TO the present low
Azure OF s5n.