New-York tribune., 1922-10-29

'ls23. ........ 3ao.l 4e.5 ss.i
inc ts,..., aol lis 70
.Estimatsd,
Earnings for 1922 are estimated
these estimates being based on the nor
NAL seasonaI variations Of both gross
and net taken In conjunction with
actual earnings to date of latest month h
ly report.
The tremendous increase Of earning
power that Is shown In 1922 as com
pared with 1912 is due primarily to the
expansion in mileage that occurred in
1914 Nevertheless, earning power mas
Increased very substantially for II we
calculate the gross revenues Of the two
years on a per mile basis, we obtain
in round numbers $4,000 In 1912 and
$4,000 estimated for 1922 or an in
crease of SO per cent.
New York Central was one Of the
few railroads that did we'll In 1921
which was generally poor year for
all lines of business The company
closed the twelve months' period with
nearly per cent earned on its stock
and was earning at rate of better
than IL per cent this year prior to
the time that the coal strike set In.
After that the trend turned downward
as result Of curtailment of coal ton
mage. which forms large part Of the
compan 8 freight traffic. The down
ward trend was further acceler rated by
complications arising from the shop
mems strike. so that by August the
indicated rate for the year had been
reduced to about per cent
put the coal strike has been settled
and the railroad strike has collapsed
and the change in conditions came Just
as the railroads were entering the pe-
tloo OF the year when earnings are
S;argest. In view of the continued
heavy movement Of coal to replenish
the depleted stocks, It Is probable thai
q good deal of the loss suffered dur
ing the strike will be regained In sub
sequent months, 80 that when IL comes
to balance the books for the year the
chances are that the present estimates
VIII be found to be below the actnai
figures. ''o"'
All of this has an important hear.
ing on possible dividend increaaa
Ii the company could earn nearly NOR
cent In poor year like 1921. it cer-
talniy can show much better results in
u good year such as 1922 would have
been under normal conditions, And
tne Tn, proof Of this is found in the In
alcated rate that was shown prior to
the outbreak Of the coal strike. Un.
der normal conditions, therefore. IL
seems reasonable to expect an earning
power sufficient TO permit payments Of
'ullv per cent on the stock and still
carry a good margin to surplus.
ihat many believe an increase in
the dividend rate will come before long
Is indicated by the price Of the stock
Dividend Record
The New York Central Railroad suc-
ceeded In 1914 the New York CentTa,
q Hudson River Railroad, which dates
from 1869. The new company came a.
result Of merger with the Lake Shore
and several other subsidiaries.
The first dividend on the atoct ,r
the TO rner company was paid in 1870
ana sl@ce that date payme1ss have con-
slnued without interruption. Since
l9lo the annual rate has been five per
cent, but prior to that it was higher
10 some years and lE other years lower.
Margin of Safety of Earnings
In the table below will be found
figures sho'sing the margins of safety
above interest and dividend PAYMENTS
aur1ns the last ten years. The figures
are based on the percentage that in
come available for interest and divi
dends could decline and still leave
sufficient to cover these payments.
thus in 1919, If total income had fallen
per cent, just enough would have
been earned to meet interest and divi-
bends, but if total income had de-
'lined 35 per cent fixed charges would
have covered, but nothing would have
oeen left for the stock.