New-York tribune., 1920-01-12
tombstone Tire & Rubber

r, ~uestlon-ln considering the purchase of
r. L. Johnstone Tire & Rubber Company
stock which is unlisted note a very favor
able article in The Bankers Journal" ]
would like to ask your advice on an invest
mentor this kind and where you would in
ouire as TO the stability of the company and
its affairs.-T. r. r.
Answer-Although we are assured
that the Johnstone Tire and Rubber
Company has passed from the nrosnec-
tive into the productive stage. we do
not recommend the purchase of the stock
as an investment. The companys plant
Is located at Logansport, Ind. Its output
at the present time does not, it is said.
Justify dividends on the stock. which is
being offered at $3.50 a share. or 2H
times its par value.
st. Paul
G4estion-l have some money which /
wish to place on a speculative stock. am
especially et interested in Chicago, Milwaukee
is selling about So. Should like I< To- know know
the earnings Of the company and whether
1'V!oends can be 4sumed with favorable
11sFlslaton 1sf;san , Also are the dividends cumu,
September l, 1917. Can you recommend
any other similar preferred stock or low
eraoe bond due to mature soon? should
also like information about Seabosrd AL
"A.
Answer-The net operating income
0! Chlcago, Milwaukee e. St. Paul for
elght months to September 1. 1918.
was sle0,995. The government guar
antee tor this period is $18,63I,184.
you may see by these figures that St.
raul Is not doing very we'll Of
course there is enough received from
.ne tl government to pay dividends on
me IN preferred stock, but apparently
the directors realize that to do 90
under present conditions would be most
unwlse. A radical change for the bet
ter must take place, or else St. Panl
Will find itself in a bad way. Con.
structive legislatioD and Increased
freight rates will do much. but we are
not quite sure that all of St. Paul's
troubles are due to government
operation. The preferred stock is Z
per cent cumulative, and the last
dividend on this issue was in Septem-
Der, I3l|. II you are thinking of nur-
chasing some security which will hon
eft BY favorable legislation. would i
not be better to consider some of +be
bonds OF the St. Paul road? They car
'alniy stand better chance than the
preferred stock. The per cent loan
OF 1929 yields at present prices over
~ per CeHt.
Western Pacific
Question-Will you please expres. an
opinion as to the outlook for Western PaciAc
haiiroad preferred stock as an Investment
y. B. S. 'eo'n'eh'
Answer-Western Pacific Railroad ;s
not doing badly under government on
Grafton. For 1918 the road showed
o.o8 per cent earned on the preferred
stock and the net after rentals for 1919
to November l is geater than for tho
Ike period in 1918. Too much cont
dence should not be placed in a roads
a,nlilty to earn we'll at present. for
there is considerable diversion of traf-
nc, and where one road gains another
road suffers: Undoubtedly the reor.
ganization of the Western Pacific waa
drastic enough to give the road
chance to earn something for it's stock
holders. and we believe that if the
railroads are given constructive lecis-
latlon and labor does not become Zoo
great factor in the situation Western
Pacific would appear to have cons;d-
grape grape speculative investment posi-