Evening Republican, Volume 21, Number 54, Rensselaer, Jasper County, 6 March 1917 — Railroad Securities Not Tempting to Investors Under Present Conditions [ARTICLE]

Railroad Securities Not Tempting to Investors Under Present Conditions

By FRANK TRUMBULL

Chairman Railway Executive*’ Advi*ory Committee

There seems to be a popular impression that there is an inexhaustible reservoir of private funds available to the railroads upon demand for whatever purposes they may have in mind, and that the function of the public is simply to regulate their use. Unfortunately for all interests, this is not the fact. A railroad is not like a camel. It cannot live upon its own humps nor sustain itself from within. It needs a constant supply of fresh sustenance from without in order to reach its normal growth and perform its ? normal functions. Investments in railway securities are made by bankers and individuals on exactly the same basis they are made in other securities, and if railway offerings fail to measure up in competition with other offerings, they lose - just that degree of popularity. The investor...mixst..ha.tempted, •either by profit-or by stability of income-.-- Ho finds neither of-these.assured to his satisfaction in the railroad business under existing conditions. . — —-It-is.Jtrue that there is some financing from time to time, but it is fi n will inevitably he more^J impaired. ! In other industries melon-cutting is again in fashion, and any number of industrial concerns are earning 40 or 50 per cent, or even more, on their common stock. It is true that the railroads have just had the most prosperous year in their history, but the net earnings, after deducting taxes, hire of equipment and rentals, is only about six per cent upon the value'of the property devoted to public use.