Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-13
Everybody's
Business
Earnings of Several Roads
EXPECTED to Be Increased
i Higher Freight Rates
Are Granted by /. C. C.

NEW 1SftAs OCtoDCi 4o.-hl III
crease in freight rates of 7Ka per cent,
If granted by the Interstate Commerce
Commission to the American railroads,
should mean additional per share earn
ings Of $4.90 for Atchison, Topeka &
Santa Fe, $50 for Baltimore & Ohio,
1915 for Rock Island, $2.25 for Lacka-
wanna, $3.50 for Erie, $685. for ILL
nois Central, SO for Missouri Pacific,
$3.50 for New York Central SO for
New Haven, $375 for Southern Pacific
and $525 for Southern Railway.
An announcement regarding rate
increase is expected to be made at
an early date and, according to Senator
Watson, will not be as far-reaching as
the railroads desired. The Senator,
however, feels that all forms of trans
portation should be placed under reg
ulation of the Interstate Commerce
Commission, as are the railroads, which
are Under heavier expenses to conduct
their business than the variouse COM
peting systems, including trucks, buses
and aviation.
In reference to the possibility of
many securities losing their legal
standing through legislation and the re-
sultant desire on the part of institu-
lions 10 liquidate such holdings, it is
reasonable to state that no large-scale
selling should be expected on that &C
count.
1906 New York Legislation.
1t may perhaps be recalled that. In
1906, the New York Legislature decreed
that insurance companies operating in
the State must liquidate their invest
ments in common stocks. the authori-
ties feeling that ordinary shares do
not belong in the portfolio Of an in
surance concern.
Fearing a sharp reaction, the compa-
MES were given five years within which
to sell. In 1911, however, it was found
stock was still for sale, which prompted
the authorities to extend the period for
an additional five years. The same
happened in 1916, and it was not until
1921 that the liquidation was COM
pleted. Whatever measures may be
taken that might affect adversely the
status OF institutions. it Is safe to assert
that nothing Of damaging character
will be done
The banking situation in Ohio Is ex-
pected to improve considerably as a
result of ruling by the State attorney
general to the effect that real estate
bonds may henceforth be pledged to
secure funds Of county, municipal and
OlSlIiCIo W ILLS
real estate obligations were ineligible.
and 1t was necessary to post as security
surety bonds and miscellaneous obliga-
tiors.
Owing to the fact that many Ohio
institutions are understood to hold rela-
lively large amounts of realty issues,
the above decree comes as a distinct
relief and should set at rest many an
unfounded rumor regarding the alleged
precarious banking conditions In the
State.
British Stocks.
The rise in British stocks. to which
attention is frequently being called, Is
less encouraging than would appear on
the basis of a superficial analysis.
Whenever a currency declines the quo
tation OF fixed income bearing issues
declines, the recession theoretically
corresponding to the extent OF the de-
probation of the currency in question.
In the case of equities-that Is, COM
mon shares-a rise taxes place CORE
spending to the fall in currency.
A decline in the value OF currency
in terms of gold means greater profits
for corporations, but although trans
lated into gold such increased profits
are really only imaginary. The same
applies to dividends paid.
1t will be recalled that in the days
when the German currency deteriora-
ton was at its height. German shares
were quoted in terms of billions OF per
cent, and one concern in Berlin de-
clared a dividend of one hundred bill
lion per cent on shares OF par value
of 900 marks. In actual money, the
phenomenal" dividend amounted to
less than "a cents.
Declaration of an extra dividend by
Swift International, Latin American
of Swift g. Co., is indicative
of the fact that investments abroad, If
made, can turn out very pro-
fitably.
This view is also borne out by an
analysis Of last years earnings of Swe-
den's industrial enterprises. Concerns
whose activities are confined chiefly to
domestic markets reported for 1880 a
net profit Of So per cent on the COM
bined capital and reserves. This fig
ure compares with 81 per cent for
1929, 5.4 per cent for 1928, and Al per
cent for 1924.
Swedish industrial concerns, whose
activities are international in charac-
ter. such as Swedish Match, S. K. F.
and Ericsson, reported for the past year
net profits Of IA per cent, against 8.6
PSA NSAV Az AOSot o'A pei NShp AAA AOSO
and 4.8 per cent in 1924.
Stake in Amstelbank.
Americas stake in the AmStelbank.
Dutch subsidiary of the Austrian Credit
AnStalt, and which has been granted
an official moratorium, is placed at
$40, 715,000, or about 40 per cent of
the total amount involved. The British
are second with $5.715 900, followed by
the Dutch with $5,43o, 900, the Swiss
with $2.285. 900. the Austrian National
Bank with 100000 the Italians with
$500, 900, the French with $715,000 and
Baron Rothschild personally with half
a million.
When the parent company in Austria
got into difficulties the affiliate in
Amsterdam could not withstand the de-
mand for funds on deposit with the
bank or the withdrawal of short-term
credits.
To protect the creditors the closing of
the institutions was ordered although
it is felt that, given somewhat more
normal conditions, the assets of the
institutions will prove more than ade-
quate to cover existing liabilities.
CCopyright. 1881. by the North American
Newspaper Alliance, Inc.)