davidaulloa/AmericanStories huggingface dataset:
New-York tribune., 1922-01-22
No Remedy

A railroad is not the kind of COM
modify that is readily salable. 1t is
worth comparatively little except as a
railroad. It's rates are fixed, the
wages. it has to pay are fixed. Its
material costs are largely beyond it's
control. Nobody wants it unless there
is a margin between operating expenses
and operating revenues. If there is
not this margin it is little consolation
to the first mortgage bondholder that,
if his interest is not paid, he and his
fellow -bondholders can legally take
possession of the road.
This consideration applies with espe-
cial force to bonds secured by a first
mortgage on branch lines or on por-
tions of the main lines which are not
essential to the operation Of the system
as whole. Recent reorganizations.
have laid great emphasis on this point
and the divisional mortgage which was
twenty years ago considered q gilt
edged investment is now looked at
askance unless the property on which
system as . whole.
New-York tribune., 1922-01-22
Second Stage Begins
In Railroad Financing
Lines With Second Grade Credit Now
Coming Into Market for Funds;
How Some of B onds Compare

lTH the issue of Southern Railway development
wv recently in
ing Of railroads in the
always the after period of tight
creo were the first to sell bonds The
Central the Louisville Nashville Illinois etc.
her needs The Northern
en issue Of $23O00O000 bonds had
railroads with less high credit
New-York tribune., 1922-01-22
Fnroice Price

In cases Of merchandise purchased
cost means invoice price less dis
counts, except strictly cash discounts
approximating fair interest rate
which may be deducted at the option
or the taxpayer provided consistent
course is followed. To this price should
be added necessary charges incurred
in acquiring the goods.
In the case of merchandise produced,
cost includes cost Of raw materials and
supplies, labor and expenses incident
to the production of the article, in
Guiding a reasonable proportion OF
management expenses, but not incud-
ing cost of selling or return on capital.
In any industry in which the usual
rules for computation of cost or pro-
duction are inapplicable cost may be
arprcSimated on such basis as may he
reasonable and in conformity with the
eSta blished trade practice in the par
ticular industry.
Under ordinary circumstances "mar-
ket" means the current bid price pre-
vailing on the date of the inventory
for the particular merchandise in the
volume in which ordinarily purchase d
by the tax payer. Where no open mar
ket quotations are available, the tax
payer must use such evidence of the
Ialr market Falue on the date or dates
nearest the inventory as may be
available.
Goods in process of manufacture
may be valued, for purposes of the in
vcntory, on the lowest of the follow
ing bases: GD replacement or repro
duction cost prevailing ct the date
of the inventory, or ca the proper
proportionate part of the actual i'm
ished cost, or, under abnormal con-
ditions. (3) the proper proportionate
part of the sales price of the finished
product.
In such cases account shall be taken
OF the proportionate part of the total
cost of basic elements represented in
such goods in process of manufacture
at the stages at which they were found
on the date of the inventory.
New-York tribune., 1922-01-22
Net Loss

Permanent provision Is made in the
res law FOR the equalization Of tax on
The net income Of q trade or business
over q pericd of years BY providing ior
the deduction Of ret ,osses sustained in
one year from the income of succeed
Ing year. The 1921 &C. provides that
re. losses sustained by a taxpayer in
sry taxable year beginning after De
cember u. 1920 NAY be deducted from
the net income for tie succeeding texa-
BE year if sufficient. and if net. the
6si,ncc o. such lcss may be deducted
from the income Of the next succeed
ing taxable year. This provision ap-
pies 2 $50 20 members OF partnership
and benefciaries OF an estate or trust.
Net loss as used in the statute
means Only net loss resulting from
;ae operation during the taxable wear
Of any trade or business carried on by
the taxpayer. including losses from the
sale or other disposition o. real estate
machinery or other capital assets used
IN tine conduct Of the trade or business
Neither the loss reflected in the income
tax return Of the taxpayer nor the loss
shown By the taxpayers profit and loss
account necessarily shows Tho amount
ef net loss which is deductibie. Such
loss must be computed in accordance
with the terms OF the statute.
The de 'ucth'e loss is the excess of
tae deductions allowed bv the taxing
art over tie sum of The following:
2 The gross income for the taxable
A' year.
. TIE amount by which the interest
50 received free from Federal income
tsy exceeds so much of the interest
paid OF accrued within the taxable
.ear on indie btedness as is not deducti-
HE from gross income.
2 The amount by which the deducti-
"' bic losses not sustained in such
trade o. business exceed the taxable
gains Or profits not derived therefrom.
a Dividends deductbe from gross
- income
r So much of the depletion deduc-
ton allowed with respect to any
nine oil or gas Wei, as is based upon
discovery value in lieu of cost.
As it is assumed that all losses sus-
famed by q corporation are in con-
iectcn with the trade or business of
the corporation, item go above is ap-
p''cable only to individuals. Item (4
APPLIES Only in computing the net losses
OF corporation. as dividends are in
GUIDED in the gross income Of an in
cvidual.
New-York tribune., 1922-01-22

fh ceof
W ne domestic Distribution
of The
New-York tribune., 1922-01-22
Tinplute in Demand

The demand for tinplate is heavy,
as result most Of the plants are
working full capacity with prospects
duction Of wire nails, field fence, barb
wire and other wire products is re-
ported as being up to expectations,
with propsects for increased produc
tion the coming spring.
Homestead Steel w orks is making ex-
celcnt production this week. All the
mills are operating with the excep-
tion Of the 38-inch mill and the How
ard Axle Works. The open hearth de-
partment of the plate mills is lead
ing and is producing big tonnage.
There is decrease in production
at the La Belle plant of the Wheel
ing Steel Corporation, as only about
10 per cent of the plant is operating
this week as compared with As per
cent last week.
Iron and steel men of the Wheeling
district look forward to better bust
ness within the next few months
New-York tribune., 1922-01-22
Spcc4ol Dispatch to Tho Tribune
PTTTSRURCH January q
NHE outlook in the steel indus
try is not exactly flattering,

try is not exactly hattering,
according to leading steel
manufacturers in this district, who
profess to see some dull months
ahead, but not months Of stagna-
ton, as during middle of last year.
The impression here seems TO be
that there remains yet lot to be done
in the process of readjustment Of ma
tional business conditions before in
dustry can get going good on the up
grade. There is some new business in
sight for the steel mills, the operating
schedules are slightly improved, some
new tonnage is coming in, working
percentages are slightly higher than
the average for the last quarter Of
1921, but the hoped for revival is afar
of, SO careful observers in the industry
predict
Jobbers and some of the larger
manufacturing consumers have been
slow in completing their inventories,
and in consequence buying from such
sources has not developed in the volume
which is expected next month. Prices
generally are holding at prevailing
levels, though no large inquiries such
as are required to test the market
have made their appearance.
Some improvement in demand for
steel products is apparent, though
operating schedules are still on re-
stricted basis. Automobile interests
are coming into the market in quiet
way for larger tonnages and are show
ing disposition to book future COM
mitmeNts
New-York tribune., 1922-01-22
Earnings or Security

The question that is often brought
up is as to whether the investor will
be wiser to choose an underlying bond
OF weaker road or junior bond O.
road that is strong at present. In
the one case the investor takes the
chance OF having to hold his securities
through organization, with the pos
sibility of delay, Or even temporary
default Of interest payments; on the
other hand he takes the chance of the
character of the management chang
ing. or some general condition affecting
traffic or expenses changing, and his
road becoming weak. Examples Of
such a change are the Chicago, Mil
waukee & ST. Paul and the New York,
New Haven & Hartford.
Which horn of this dilemma the in
vestor should take depends on the in
vestor himself If he is the kind Of
man who locks his investments I'D in
safe deposit vaults and thinks of them
only when it comes time to cut and
cash the coupons, the chances are that
he will be better off if he sticks to
underlying securities.
If, on the other hand, he follows thu
monthly earnings of the property in
which he is interested, reads the com
pany's annual report, watches for news
affecting the company, and, in general.
keeps himself informed sufficiently to
be able to form an Independent judg-
ment as to what is going on in the
affairs of the company, he is we'll
fitted to take advantage of the higher
yield afforded by junior securities
without serious risk of loss.
Even in the case Of underlying Sc
curities, it is essential that the inves-
tor apply certain elementary tests to
the bond he may select, preferably
before he actually buys it. In the first
place an absolute first mortgage of
itself is not a guarantee of safety,
even where the amount of bonds is
sued per mile under this first mort
gage represents comparatively con-
servative sum, when compared with the
cost Of building the road.
The Chicago, Great Northern, some
years ago, went into rhe hands of a
receiver and had no mortgage bonds
whatsoever outstanding against it.
The Chicago & Alton first 3s are an
absolutely first mortgage on the prop
erty, but unless the Alton Develop
power to earn at least its interest
charges on these bonds, over and above
expenses, the bondholders are likely to
suffer q loss,
New-York tribune., 1922-01-22
III Example

ne following example will show the
r'e'hod Of computing the net loss Of a
corporations:
assuming that for the taxable year
l'@i corporation has deductions of
A-'UO0o, computed under Section 234
o. ihe act; adjustment on account of
oepietion $4,000; gross income as COM
pu1ed under Section 233, S1OO,O0O; ex-
cess of exempt interest over interest
not dedUctible, $4,000; and received
dvldends allowed as deductions of $40
ooa. the following set-up will show the
deductib,e loss which can be taken in
1922:
,sross income 500. 600
''ldends ..........-.. c.0o0
,epletion ............. $1,000
Exempt interest...., 5000
Statutory net loss. s........ $4,000
The following example will show the
method Of computing the net loss of
an indivdual:
Assuming that for the taxable year
ly2l an individual has deductions Of
10000, computed under Section PA
OF the act; gross income of $4,000.
computed under Section 213; excess of
exempt interest over interest not de-
ouctlble, $4,000; excess of deductible
New-York tribune., 1922-01-22
Decline in Actiuity

There has been a preceptible decline
in activity in tubular goods, particu-
larly in pipe for the oil country. Some
of che current production of pipe is
going into stocks. More active buying
of merchant pipe by some of the larger
jobbing interests is anticipated over
the next few months.
Jonathan Warner, president of the
Trumbull Steel Company, at Warren,
Ohio, the third largest independent
producer of tinplate in the country,
predicts a business revival this year
which will develop in a gradual way.
because we are getting back to the
fundamentals which were forgotten the
past few years, firm foundation for
industrial Improvement is being estab-
lished," he states. ECONOMY and
thrift always precede business re-
vival."
Mr.. Warner states that the demand
for steel products, especially the
lighter grades, is broadening and that
production of the mills is consequently
expanding. He attributes this condi-
tion to the larger spirit of optimism
prevailing in business circles, to
easier money conditions and also to
the fact that finished steel prices are
low in virtually all directions.
New-York tribune., 1922-01-22
Confidence Helps

"lf we did not have confidence that
there would be greater business and
that it would come in sufficient guam
titles to warrant it, we would never
have started our new blast furnace"
states Mr.. Warner. He is likewise
vice-president Of the Trumbull-Cliffs
Furnace Company, whose new 600-ton
New-York tribune., 1922-01-22

arc secured by a first mortgage on
considerable part Of the entire main
lines Of the company.
Nashville, Chattanooga & ST. Loui.
consolidated 5s. due 1928, selling at
price to yield 5.52 per cent. have the
characteristics Of the other bonds in
this list.
New York Central & Hudson River
first 31as, due 1897, sell to yield 4.5e
per cent.
Norfolk s. Western first consolidated
4s, due 1896, are selling at price to
yield 4.65 per cent.
Oregon Railroad and Navigation frs.
consolidated as, due 1916, sell at price
to yield oil per cent.
Oregon Washington Railroad end
Navigation first and refundng As sell
at price to yield 5.23 per cent.
Pennsylvania Railroad consolidated
as. due 194S, sell at price to yield
4.87 per cent. With these bonds the
huge equities which lie between then
and default are sufficient. it is be
levcd, to Offset the fact that the Penn
sylvania is no longer the railroad o.
unquestioncd earning power that it wa
prior TO the war period.
Union Pacific first railroad and land
grant As to sell to yield 1.7i per ccn>
Omissions
What. leave out Michigan Central
~. tho Reading Company and Phila
telphia e. Reading Coal and Iron gen
eral is, and Southern Pacific of Cali
fornia first consolidated 5s
FOR these reasons.
The Michigan Central 31as, Of which
there are only S18,0O0,000 outstanding.
are secured by first mortgage on the
nam line across the Michigan PENN
sula. Inc line is a part Of one OF
the alternate main trunk lines be
tween New York and Chicago, but it
is secondary line. 1t is not in the
same class with the Lake Shore main
line from Buffalo to Chicago, which is
not intended to imply that it is any
thlng but fine piece of railroad. The
point which we are trying to make i
that IN the selection of the sctentecn
bonds, all OF the various considera-
tons which are applied to a railroad
bond are. as nearly as may be, met.
mus the Reading Philadelphia 4
Reading Coal and Iron bonds ranked
OF the highest grade are not included.
because of the possibility which ha
become certainty. of the separation
of the coal and railroad properties OF
the Reading, and the possible change
IN the security or the character of the
security of the bonds.
The Southern Pacific of California
frst consolidated 5s are secured by d
first m ortgage on 685 miles of railroad.
and there are only s4,127,5o0 of them
outstanding. The controlling factor in
leaving them out, in this case, was the
comparative smallness of the issue and
the lack of a free market for the
bonds.
Although all of the bonds named arr
not secured by closed mortgages, the
majority of them are, and with only
one or two exceptions future railroad
financing will not be done through the
sale Of these bonds. Of the new issues
| that will be offered to investors there
will be underlying bonds of weaker
roads and junior bonds of both strong
and weak roads.
New-York tribune., 1922-01-22

losses not sustained in trade or bust
ness over taxable profits not derived
from trade or business, $4,000; and
adjustment for depletion, $4,000, the
toilowing set-up will show the de-
ductlble loss which can be taken in
New-York tribune., 1922-01-22

This Is the second of series of in-
tte'pretotiue articles on the aeqc ta1
lap wTitten for The Tribune By Mr..
Frey. Others soiU appear on subse-
QMent SuNdqgs.-Fi, Fi,sanciaL Editorl
New-York tribune., 1922-01-22
Chicago e. North Wester1,

Chicago & North Western general
31hs, due 1887, selling at price to
yield 4.87 per cent, are secured by a
first mortgage on the main, double
track line from Chicago to Omaha.
The Great Northern first and re-
funding AIS, due 1861, selling at a
price to yield 5.11 per cent, are Sc
cured on more than two thousand miles
of the Great Northern's transconti-
mental main line.
Illinois Central first As, due 1911,
selling at price to yield 4.65, are
secured by first mortgage on the
northern half of the Illinois Central's s
main line.
Lake Shore & Michigan Southern first
3hs, due 1897, selling at a price to
yield 4.58 per cent, arc secured by a
first mortgage on the New York Cen
trails main line from Buffalo to Chi
cago.
Louisville & Nashville unified As, due
1910. selling at price to yield. 4.72 per
cent. arc secured by a first mortgage
on the company's main line.
Minneapolis, st. Paul & Sault Ste.
Marie first consolidated 4s, due 1888,
selling at price to yield 5.21 per cent,
New-York tribune., 1922-01-22
The Highest Grade

In alphabetical order the gilt edged
rail bonds are:
Atchison, Topeka & Sante Fe general
As due 1895. selling to yield 4.55 to ma
turity, secured by an absolutely first
mortgage on the greater part of the
main line Of the Sante Fe, running
from Chicago to California. having an
equity in junior securities totalling a
number Of hundred millions, and the
obligation of company which is show
ing, and has shown over a long period
of years, ample earning power to pay,
not only all its fixed charges, but divi-
dends on it's stock and surplus for in
vestment in the property.
Atlantic Coast Line first 4s, due 1862
selling at price to yield 4.SO per cent
to maturity, secured by first mort
gage on main line and in general with
the characteristics described for the
Atchison as, although in each particu-
lar the Atchison bond is more so than
the Atlantic Coast Line bond.
Central Pacific first refunding As, due
:S49, selling to yield 500. are secured
the Southern Pacific System, running
from Ogden to San Francisco. These
and the bonds which follow have the
general characteristics of the Atchi-
son as.
Chicago, Burlington g. Quincy gen.
eral 4s, due 1868, selling to yield 4.7S
per cent. There bonds are secured by
first mortgage at the rate of only
1888 per mile on the main line of the
Burlington. They have the character
istics Of the Atchison as, only, in this
case, each element of security is
more so.
The Hope pioneer., 1922-08-17
OWNERS-U.M.W. TRY TO AGREE
Big Illinois Company Bolts the oper-
ators Combine.

Cleveland-Defnite steps designed
to end the nationwide coal strike and
Immediately resume production at Is
per cent of the country's bituminous
mines have been taken here
Members of a newly created SUBJ
committee met to craft wage scale
Cor submission to the conference of
miners and operators of the central
competitive coal fields.
The new scale wi: be based on the
1920 wage scale ald continuation of
the checkoff system
Termination of the strike on the
oasis of such an agreement would be
neralded as partial victory by both
sides.
The United Electric Coal company,
owning mining property in Ohio and
Illinois, has thrown it's Illinois tom
mage into the four state wage confer
ence at Cleveland, it was automatically
reported.
The Hope pioneer., 1922-08-17
HARDING BALKED IN MOVE
President DECIDES to Let Both Sides
Eiuht Ii Out


Washington-Balked again in his
latest peace move, President Harding
has decided to let the railroads and
the 100000 striking shop craftsmen
fight it out, at least temporarily.
So long as the railroad executives
can demonstrate their ability to main
tain service somewhere near normal.
President Harding will keep hands off.
1t the transportation system shows
signs of breaking down, and both
sides remain obdurate, the president
will ask congress to sanction federal
seizure of the roads.
The foregoing constitutes the pres
ent program of the administration, it
was learned, following the collapse of
the latest negotiations between rail-
road executives, leaders of the 16 rail.
road unions and the administration on
the second Harding peace proposal
The executives having submitted their
conditional acceptance to President
Harding and departed and with the
government outwardly marking time
developments seen in the railroad
strike settlement parley lay with the
unions still considering the proposal
Of the president that the railroad la
Dor board be permitted to settle the
question of seniority.
The Hope pioneer., 1922-08-17
PIaza-Christ Gunderson was struck

PIaza-Christ Gunderson was struck
and instantly killed by lightning.
strasburg-The Liberty Grain COM
pany has let the contract for 10000
bushel grain elevator at Wakpala, S. D.
Valley City-Contract in the sum of
$90,5S1 has been let for the new reser-
voir and water works for this city.
Bismarck-Nearly 1900 new auto
mobilecs were registered in this state
during June and July.
Grand Forks-A police court jury
found Glenn Carr, 10, guilty of speed
ing and penalizcd him by forbidding
that he drive Il car again this year
Bismarck-Reports of business for
June 80 showed that North Dakota;
banks increased their loans nearly a
million dollars this spring.
Washburn-Stanley Washburn of the
Washburn Ignite Coal company is
president and w. Il. Kraft of the Be,l-
lah Coal Mining company, secretary of
the newly formed organization of the
North Dakota Ignite coal operators.
Sawyer-SiX small girl companions
carried to their resting place the re-
mains of nine-year-old Ida Basich, who
gave her life while trying to drag her
twO-year-old brother Herman from the
path of an oncoming train.
Bismarck-It is estimated by the
state immigration department that
$500 men took advantage of the So
railroad rate from Minnesota to come
to North Dakota for work in the har.
vest fields and investigation of farming
conditions.
Minot-Safe passage for school chill
dren is the reason for the school board
Of this city urging the Great Northern
to construct subway under theil
| tracks in the northeastern part of the
city.
Mandan-Preparing the body of
Susie, $2S,000 gorilla of the owned b,
Ringing Brothers and Barnum &
Bailey circus, which died in Fargo, fol
place in the New York natura,
museum Is the distinction of J, ID
Allen. local taxidermist. The animal
died while the circus was in Fargo un(
the. carcass was sent to Mnndnn 70,
mounting
The Hope pioneer., 1922-08-17
FINAL DEATH TOLL is TEN
Check Retarded by Destruction Of
Official PASSENGER List,

Annandale-With 10 dead in the
Annandale train wreck, authorities
today continued a search of the wreck
age in the BELIEF that one or two more
bodies would be found in the debris.
Six of the "a injured, in the St.
Mary's hospital, Minneapolis, were re-
ported in critical condition.
Check of dead and injured was re-
tarded because the passenger list
made up by officials of passenger train
No. 107 was destroyed.
The official list of dead is:
Fred Lamer, Of Maple Lake; Arnie
Thompson, Annandale; Christian w.
Wallace, Minneapolis; Albert Zollmer,
Adrian, Mimi; Edmund and Raymond
Ulrich, Horizon, Wis; Bert Clark,
St. Paul; Robert Becker, St. Paul, died
from injuries and Emil Myllgangas,
Annandale, died from injuries an uni
Identified man.
Officials of the state railroad and
warehouse commission will conduct
an inquiry into the wreck. The men,
bers of the commission visited the
scene Sunday the 18th to gather evi-
dence.