Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-12-03
GOSSIP OF
THE STREET

Not in n long while has there been
Such divergent views concerning an i'm.
portant development as that expressed
yesterday regarding the so. called
southern Pacific segregation plan. or
course, in the first place no one knows
.he real value of the oil lands which
the new company will control On the
other hand, one of the prominent com
mission houses in commenting upon the
subject yesterday stated:
We see nothing to change our
original estimate that the oil lands now
sold to the stockholders are worth in
excess of $40, 600. 900. in spite of the
estimates Of nve or six times this
| amount. But potentially they may some
day be worth great deal more than
that, and they probably will be-. Dis
regarding the potential worth, we esti-
mate that the oil lands are worth at
least $50 share and the associated oil
stock worth 81 share more. giving
the Pacific Oil Co. stock a valuation
of at least S32. 1t has current earnings
of S4 per share and prospective earnings
Of many times that Obviously. AZ an
oil stock 1t il worth $40 and the rights
are therefore not greatly Ovcrvalued at
so. Here is tangible right for
| not. and IL We figure Southern Pacific
stock at the right worth from so to %,
it Is probably safe TO say that the
present price of the stock market. n
usual, Is very accurate in its estimate
Of Southern Pnciic's value"
Another authority said con" Of the
striking aspects of the Southern Pacific
Oil lands segregation plan is that lt
will put into the Southern Pacific
treasury SAB, 80 900 cash, free Of in.
tcrcst charges. This is equal to S1250
| uhar ,f t;n NJ
issue of $34T 800, 400 the amount to be
outstanding after conversion of the D
per cent convertible bonds.
This transaction will also, in all
probability, cause the conversion OF
| $40 900 900 fixed interest bearing debt
into stock, though at present dividend
rate conversion bonds will increnSe
companys disbursements by difference
between ! per cent interest and u per
cent dividends or $4GO, 900 Il year.
Consideration Of the value OF
Southern Pacific stock OK rights must
include the addition of S43. $50 900 cash
| to its liuuid resources at time wnCn
new money commands high interest
rates. Against this must b" of set
transfer of oil properties and income
thcrCfrom. Since the company j. to sell
oil properties to its stockholders at
much less than their value. 1t is un-
| llKclS tnr DfOcttuS Cdn Dc llN'H'Hl
in the railroads facilities so as to yield
as great rct.lrn as the company has
been realizing from the oil properties.
Will Preserve Old Landmark
Charles :. Patton. Of Sailrr & St"v-
enson. was elected n member Of tn"
Philadelphia Stock Exchange on We'd
ncsday afternoon, taking the seat for
mcrly held by John Sailcr of tn" same
firm. who it Is understood. C0ntcmpatcS
retiring from active business ut tn" Ell
of the year and make an extend 4
European trip. 4
Mr. Patton thereby becomes the he
of this old established conservative
banking firm with which he became as
socatcd nearly fifty years ago in a
clerical position. When the old firm OF
John Sailcr and George Stevenson dis.
solved som" years ago after successful
career, che business was turned over IL
the sons Of the two partners and Mt
I Patton. A new partnership, trading
under the old established firm name. wa
formed by John Sailcr. George Steven
son and Mr.. Patton. Upon the death
of the younger Stevenson. the business
was carried on by Mr.. Sailer and Mr.
Patton. Although having retired from
active business. the elder Mr.. Steven
son retained desk room and, until I
short time ago, was q daily visitor a
the office.
While Mr. Patton has not yet an