New-York tribune., 1922-10-29

i
est, largest and strongest Of our rail
road systems ard promises to be still
further augmented and strengthened
through merger with railroads that II
1 controls, some Of which possess an
earning power far beyond anything
that they pay cut in the way Of divi-
dends,
The present great system, aggregat-
ing il.67e miles Of owned, leased and
controlled lines. dates back to 1926
when the Albany & Schenectady the
| first railroad to be built In the State
/ Of New York, was chartered, During
nearly loo years the New York Central
has grown and developed with the coun.
try II has been ably and conservatives
ly managed and Its bond issues have
long been classed among the highest
grade of railroad investments.
From the date Of the frst impor rtant
consolidation, In the latter part Of 1859
--ffty-thre ee years ago--New York Cen
trnl stock has never failed to pay IA
dividend In each and every year. Dur
| ing the laat ten years or more the
| annual rate has been per cent,
Growth of Capitalization and Mileage
Funded Capital Total
isss:::: iisss 's!:. 81. 'ssi.s ssi:s 1888 ,.iisas
The foregoing statement of capitali-
ticns of the New York Central Rail-
road proper, together with the capitaii-
zation--bonds and stock-of leased
lines outstanding in the hands of the
public. Two II New York Central's
important leased lines are the oBston
& Albany and West Shore railroads
Between 1912 and 1922 the New York
Central operated mileage increased
from 3791 miles to 6,098 miles, or 81
per cent. This large Increase In oper-
ated mileage was occasioned mainly
by reason of the absorption of the
Lake Shore and certain affiliated prop
erties--long controlled but hitherto
separately operated - into the New
merger Ia also the principal reason
for the large increase In funded debt
noted above.
The New York. Central also controls
ndmber of other railroads by ma
jority stock ownership, prominent
among which may be mentioned the
Cleveland, Cincinnati, Chicago & st.
Louis, the Michigan Central, the Pitts
burgh Il Lake Erie and the Toledo {.
Ohio Central. These companies ,p-
crate in the aggregate some $3.50 miles
OF road. The Ntw York Central also
owns large block Of the Reading
Company stocks and majority inter.
est in the common stock Of the New
York State Railways, which operates
an extensive urban and interurban
electric railway system serving the
Mohawk Valley region Of New York
State.
1t seems probable that the New York
Central will seek gradually to absorb
the steam railroads that it controls
Several months ago a proposition was
made to minority stockholders Of the
Cleveland, Cincinnati, Chicago & St.
Louis to exchange their stock for New
York Central stock on the basis of par
for par for Big Four" preferred and
100 shares Of Big Four" common for
eighty shares of New York Central
stock.
The New York Central also made a
proposition to lease the Toledo g. Ohio
Central, whose entire capital stock it
owns, together with the latter roads
subsidiaries. The Interstate Commerce
Commission has sanctioned the pro-
posed lease and also the acquisition of
the Cleveland. Cincinnati, Chicago &
st. Louis minority stock.
If the merger of these properties
Is ultimately consummated 1t will add
largely to New York Central's mileage
and also to its capitalization, particu-
larly to funded debt Based on the
figures in the foregoing table, funded
debt comprises nearly rs per cent of
total capitalization, which is rather too
large to be called conservative. An ad-
justment that would go long way
toward remedying this condition could
be made if the holders of 800 o00,O0
per cent convertible bonds could be
induced to convert their holdings into
stock at l05. If New York Central
stock should sell at prices materially
above this figure the inducement to
convert would become alluring. AS
will be seen further on the chances
that an advance Of this character will
come about appear favorable
Estimated Property Value
The estimated property value OF the
company is $1,l20,000, 900, or 8 per cent
less than total capitalization. If we
theoretically retire the funded debt
and also the leased lines stock at mar
there would remain an equity in tins
property value for New York Central
stock equivalent to $8S a share.
The company, however, pos esses as
sets OF great value in addition to the |