New-York tribune., 1922-11-26

assets at the close Of 1921, as shown
above, or $19,3e8.s21.
The physical assets OF the Reading
company, GQnAigt largely of railroad
equipment which as leased to the raiI-
way company. The company also Owns
considerable rea} estate and some float
1llg equipment. These items were car
eled OR, the books at the end Of 1921
at an approximate value of So, ,508, 600,
Further assets include ownership in
stocks and bonds Of ether affiliated
companies, and also sandCy advances,
the total OF which will reach a round
Slo9,0o0, goo. This figure may be re-
garded ~ conservative, for it includes
Readings ownersn!p in the stock OF
Central Railroad OF New Jersey, which
has an equity value far iii excess Of
ItF par value OF the value at which
it is carried on the Residing books
We viii now gather o&hese iteuIs into
tabular form, In order TO obtain
conferred irrespective az TO the equity
value Of the company's several stock
issues,
Estimated Vaiaes
Philadelphia 6, Reading Rail
sS phii:asiphla S4fias 4 Reading coal 'Assz'S''0"
and Iron COMPANY equity 104,6$T ooo
Reading frOH Company equily 10 SOC ,a0U
Physical assets; Readins Com
Securities auu aavshGee. $500. 16g. 900, 900
Total easet velue. $685., Te0, e00
Deduct; funded deht. ...,..,, 1a6,100,Q0o
This balance II equivalent to an
equity Of S1B2 share Of $50 par value
or the compaay's total share capital
outstanding, both preferred aud coIa-
mon stock.
If the preferred stock were retired
at par, the equity temaining for the
$40, 900 600 common stoefe would amount
to $214 a share Of $50 par value.
Reading Company's stock issues con
sist oI 32s, ,000,0 900 Hrst preferred and
SA2,000, 600 second preferred, each issuo
being. entitled to per cent. non
cumulative dividends annually in the
order of their priority before anything
can be paid on the common, The pre-
ferred and eolnmon stocks have equal
voting power and in liquidation or dis
solution OF the corporation shall share
equally In :. pro rata distribution Of
assets. The second preferred is CON-
vertible, at. the option Of the company,
l,slf into iFst preferred and hay into
common.
The Reading Company reserves Tie
both classes of preferred stock at par,
in cash, if allowed by law. Whether
OF not this will be attempted remains
10 be seen, but in shia connection 1t is
well to note that The Supreme Court
ig decision rendered May 80, 1892,
held that preferred atocKholdars were
entitied 20 share equally with the corn
mon stoGkh olders in the distribution
Of stock IN the new coal company 10 be
formed under the segregation plan.
The above explains Why we have es
t,blished two equity flgures IN the
eompany'S catimated agset Vaiue-~one
for the entire stock capitalization and
the other for the common stock alone.
Dividend Record
Reading arst preferred paid It's mi
tial dividend al 8 per cent IN 1900. In
1901 per cent was paid, and IN the
following yesr 0 per cert. Fxom 1903
TO date the full 4 pes Gent annual rate
has been paid.
Reading second preferred paid lis
initial dividend OF - per cent Ia 1902
In the following year and each suGceed~
ing year thereafter, the full per cent
annual rate has been paid.
Reading common paid its initial diyt-
lieud OF i u per cent In 1905, From
1905 to 1909, Inclusive. the annual rate
was 4 per cent Fregn 1910 TO 1912 in.
elusive. the annual rate was 6 per caat,
And from 1913 10 date it has been $
per cent.
Margin of Safety OF Earnings
AS holding company, Reading Com
pany's earnings are mostly made UP OF
interest and dividends received from
lis ownership in subsidiary company
securities, together with the rental paid
hy the Philadelphia Il Reading Rail
way for the use OF tAe railroad equip
ment owned By the parent company.
The point. has besn raised as 10
whether or not the Eeading Company
would continue TO be able to Pay Its
eurrant dividends after tho segregation
of the coal company and also ia case Y
Ia obliged so dispose lof its holdings III
Central Railroad Of New Jersey stock.
There seems uo apparent reason 20
doubt the ability Of the Reading leni-
pany to accomplish this nndersdorfnai
conditions.
BY lar the larger part OF Reading =
earnings comes from It's railroad sab
sidiary IN sans during the psss two