New-York tribune., 1922-11-25

we'll for twelve months, but as soon
as the coal strike intefyened they be.
gan to decline rapidly, and at the end
Of ne months all the early gains
were lost and less an $t3 600 re-
maired as balance after charning off
all expenses and the nine months pro-
portion of taxes. Nearly 30 per cent
of anthracite and bituminous coal, and
the loss Of this traffic during the
strike was q serious handicap to the
companlv's earninr mower.
It Is probable, now that the strikes
are out Of the way, that earnings Tor
tho last three months will be better
than normal, but IL the company is
to cover It's fixed charges for the cur,
rent year it must draw heavily uoon
It's coal subsidiaries. In 1921 Erie
drew down approximately $S000,000
rom it's mining subs diaries, and IL it
can do equally we'll this year 1t
ought to be able to squeeze through
with fixed charges just about covered.
provided no further setbacks occur.
Dividend Record
The present company was iDcor-
porated in 1895 as a reorganization Of
the New York, Lake Erie e. Western
sold under foreclosure. The latter
comranv was reorganization In 1878
of the Erie Railway, which in turn was
q reorganization OF the New Iork q
| Erie chartered In 1882.
The first preferred stock of the pres
ent company has priority In respect to
dividends over the second preferred,
and the latter has priority over t e
common. Both issues are entitled TO
receive non-cumuiatlve dividends at
the annual rate of per cent.
In 1901 an initial dividend of IN
per cent was paid on the first pre-
erred stock, rising by stages to 4 per
cent in 1904 and remaining at that
rate through the first half of 1917.
On the second preferred stock 2 per
cent was paid in 1905, per cent in
1905 and per cent in 1907. No divi-
dends have since been paid on either
preferred issue and nothing has been
paid on the common stock. The above
statement refers to the present COM
pany, chartered In 1896.
Marg Of Safety of Earnings
The margins of safety above inter
est and preferred dividend require
ments shown in the table below are
based on the percentage that income
available for these purposes could de-
cline and still leave enough to meet
the requirements. Thus in 1912 total
income could have fallen per cent
and still left sufficient to cover xed
charges in full and pay 4 per cent on
each of the preferred issues. A drop
of per cent would have met fixed
charges and the dividend requirements
on the first preferred stock, but would
have left nothing for t second nra-
ferred. A drop of 20 per cent would
have left barely enough to cover tixed
charges.
The minus signs indicate the neces-
sity of corresponding increase n
total income in order to meet require
ments. In 1922, for example, total
income, based on present estimates,
would have to increase 36 per cent to
c,ver estimated fixed charges for the
year, or 50 per cent to cover fxed
chrrges and first preferred requi e.
ments, or so per cent in order to meet
ixed charges and show per cent on
each of the two pre- erred stocks. AS
stated above, there Is possibility
t at earnings will improve su itn
to enable the company, with the help
of income from Incorporating sources,
to cover it's fixed charge requirements
{ is year. No place is given the COM
mon stock in the table as no dividends
have been pa d on the issue.