New-York tribune., 1922-09-06
Disturbed Over Pullman

II you would set my mind straight on
u.,m'an, ssnan N Last Nevember purchased
nis,ic statements made by q friend who
IL stanch believer in the future pros
as follows: Pullman has paid dividends
since 1877 and It's mana cement has been
very conservative. They have accumulated
good surplus and made several extra divi-
dends.,' The outlook for Pullman is
promising. composition Is not very annoy
selling between $50 and I6e before Janu-
ary ]. 1929. He also believed that because
company has and due to the fact that
there are no bonds or preferred stock out,
standing they VIII be In a position to pay
stock div.dsnd within % the Dy year 'ssiS's viii il
frankly admit that i mixed Investment
With speculation. as I bought with tho
However. my faith Is becoming shaken.
some time age ! saw In the paper state
h heh made .rfueo shoMng hfom as o
cash in hand; surplus. etc. were very
large. Later saw statement issued
pessm,istic as the hrst was optimistic.
This showed deficit dip into surplus to
psy dividends, cse. Very recently read. a
Ma gazine Of Wall Street, made BY sub
! scrfber. IN answering the Boston state
ment was used explaining deficits, etc.
company's ability to continue the per
cent dividend, Implying that the directors
were considering reducing, the rate, etc.
and that at 12l Pullman had reached It's
true market level. with these conflicting
statements I don't know what to do. II
would switch into Telephone and Teie-
graph. which is at the same level. However.
don't understand why whenever Pullman
| is mentioned in papers or magazines ref
enes always Is made to the railroad.
traffic. etc, end Of the business. The posi-
| eion ef Pullman as an equipment company
aknr1h MT ar md En,1n ~ nd
| enjoy similar rise like Baldwin. An
other thing. why does Otis Elevator, an s
I24? These are some of the things don't
Atchison common at Io2 Would you give
your opinion of this rail?--E. B. G.
Answer-It is impossible for any one
! to state even approximately what the
true market level for Pullman or any
other stock is. The rise in this par
ticular issue above l21 since the date
of your letter tends to bear out our
comment. We cannot comment on the
prediction Of 1s0-160 for Pullman fur
ther than to say that this company,
especially since it joined with Haskell
& Barker, should profit by any mate
| rial increase in railroad equipment
buying. According to the last reports,
the company had on hand sufficient
untitled business to keep the plants
operating at IS per cent of capacity
for several months. The Pullman
Company like all equipment COM
panies, came into the year 1922 plen-
tifully supplied with cash and with
but little, high priced material on hand.
Dipping into surplus to pay dividends
in times Of reduced earnings is not
an unusual custom for corporations
whose conservatism in times of normal
earnings made possible the accumula-
tion of a surplus for "rainy days" We
would not become uneasy on account
of that fact alone. The payment of
uneafned dividends under certain cir
cunistances is sign of strength
rather than weakness. Otis Elevator
stock has a good dividend record and
recommends itself rhore easily for in
yestment on account of the strong
demand for its products. Dependent,
as it is on building operations, the
Otis Elevator Company ran into its
lean period while other industrial cor
porations were prospering from the
very conditions which made for sub
normal building operations. Naturally,
the Otis Elevator Company turned the
corner sooner than other companies.
Atchison common Is a suitable stock
for your purpose. s