Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-01-19
RAILROADS LEAD
IN STOCK MARKET
Issues Come to Front in
Trading During Present
Week..
Special Dispatch to The Star.

Special Dispatch to The Star
NEW YORK, January l9.-An adver-
tisement by the National City Co. rec
ommending the purch, sc of the COM
mon stock" of the Pennsylvania Rail-
road has appeared in n! wspapers in this
and other cities throughout the United
States.
This is one of the most striking
phases Of the revolution taking place
not only in the attitude of the public
toward their investments but in that of
the organizations engaged in the BUSH
ness of accommodating and distributing
these investments. For Wall Street cam
not remember when one OF the leading
financial institutions of the country had
ever before publicly expressed its pref
erence for a particular stock and had
openly urged on the investment world
the purchase Of this stock.
Innovation in Method.
This innovation in method is as
startling as II, for instance, j. P. Nor
gan g. Co. had advertised that they
had made study of United States
Steel common or General Motors COM
mon and had reached the conclusion
that these stocks should be brought for
investment.
The awakening in the railroad share
U1dTkeL USBdL dUOut CWO IiUIlCAlS dSO,
when it became obvious that some of
the leading industrial stocks were going
stale" and that new leaders would have
10 be provided If the bull campaign
were to continue. In their favor we're
higher returns on the investment which
the rails gave over induStrialS and
steady gain In net earnings, and there
fore in earnings per share of stock, with
the promise that some dividends might
be increased or new stock issues author
lied giving valuable rights" to share
holders.
All through last Summer Pennsyl-
vania Railroad stock, whose par Is $50
a share, moved listlesSly between SO and
IS. At that level the yield was around
So per cent, or anywhere from II.
per cent to 2ih per cent greater than
that available on the popular indus
trials. Today at its high price above
81 the yield had declined to about "A
per cent.
There has been considerable talk of
possible increase in the Pennsylvania
dividend rate from per cent to per
cent. This Is not supported at the
present time by those who speak for the
management of the company. The
earnings of the Pennsylvania in 1928
were slightly over $l4 share, which
permits OF continuation OF the ira
ditional policy of the company of pay
ing a dollar in dividends and putting
a dollar back into the improvement
and development of the property. 1t
is believed that this conservative prin-
ciple will be maintained during 1929.
Surplus Indicated.
However, as the stockholders in
April will be asked to authorize an
additional issue of $500 600, 900 capital,
it is not improbable that during the
present calendar year rights" on
Pennsylvania stock will be available.
which is another way of increasing the
return to the shareholders without obli-
eating the management to a higher
dividend policy. 1t follows the method
so successfully employed by the Ameri-
can Telephone g. Telegraph Co.
1t may be stated authoritatively that
the Pennsylvania Railroad today has
approximately $95,000000 in cash and
liquid assets and that the preliminary
figures for 1928 indicate a surplus over
all requirements of the year of $40,-
100000. This compares with $28,000,-
900 in 1927. II the expectations. for
1929 are realized the profit and loss
surplus Of the company at the end of
this year will be double that indicated
when the company's books were closed
In 1926.