New-York tribune., 1920-11-28
Railroads Offer Investment Problems

ncnts In railroad stocks and would Ike
10 the Anaw ay "a IN" m of b Gc of aydSnas ana
II possible, STATE what railroads you con-
sider ..,1, the bess Invest,nsnt at this time.
ohio. Chicago & Northwestern, Delaware
& Hudson. Great Northern. Illinois Cen
trai hchish Valley. Louisville e. Nash
crn. Northern Pacific. Pennsylvania. Read
Ing. Southern Pacific. Onion Pacific
M A. w.
Answer-The railroads you mention
are among the best All have been
dividend payers for many years and all
enjoy good credit. However, the rail
within the last few years that many
OF these stocks are not entitled to
such good ratings as heretofore. The
railroad outlook still remains uncer-
tain, and 1t is yet to be demonstrated
how the carriers will manage under
the new legislation. Already we have
heard the complaint from the New
England roads that even with the re-
cent Increase in rates they are unable
to pay their way. Many o: the companies
whose stocks you mention have large
business. The Chesapeake & Ohio, Le-
Ugh Valley, New York Central, Norfolk
g.. Western, Pennsylvania and Reading
have, vast coal properties, while the
Southern Pacific has valuable oil prop
critics, which are to be distrib butcd
among the stockholders. The Union
Pacific derives a large part Of its in
come from investments in other prop
critics Thereforc there is in most
cases considerable value behind these
issues. This country is dependent
upon its transportation systems to
such an extent that we do not believe
the railroads will be allowed to suffer
more than they have already. The
people have had it brought before them
on many occasions during the last two
years how vital it is that our trans
portntion should be made ADEQUATE.
In order to accomplish this the car
riers must have a square deal We do
not wish our readers to think that we
regard the stocks you name AS unsafe.
We insist on distinguishing between
speculative and investment securities.
We have confidence in this country Of
ours, and, because OF the importance
OF our transportation systems, VIC be-
licve a.! the stocks you name offer at
tractive speculative investment onror-
tuntles. Many inqnircrs desiring to
invest $4,000 or s3 600, which rspre-
sents practically all their capital, ask
us to aid them. We always trv {,
consider each case separately. To such
requests we lnvariably s@g"cst only
these issues which arc 80 we'll secure |
as to both PRINCIPAL and Income that
they are not sensitive to earnings and
other Developments. Fer the investor
With large amount Of capital a GER
tain proportion invested in such stocks
rs you mention is not inadvisable We
rive. You the par value nn1 present
dividend rates: Atchison. par 500,
fatc per cent; CanaAian Pacific. SlO0.
10 per cent; Chesapeake {, Ohio $10O,
per cent; Chicago G. ND~thwestcrn
$780, s per cent (recently red cca fror,
, ner cent? Delaware & Hudson, 500,
per cent; Great Ncrthcrn 500. +
; per cent; Illinois Central, 500. ner
cent; Lehigh Valley, $50. per cent;
Louisville & Nashville, 800 7 per
cent; New YORK Central. 800, S .er
cent; Norfolk & Western, 500, npr
cent; Northern Pacific, 500, I per
cent; Pennnssylvania, SO, 6 per cent;
Readlng, $40, 3 per cent; So, .hern
PaciHc, $500, 6 per cent; Union Pacilc.
800, 10 per cent.