HOME RAIL PROSPECTS
I shall not be surprised to hear that agreement has been reached between the railways and the Government. During the past few days the two sides have come much closer together on terms which should, be acceptable to railway stockholders. I forecast that as a basic minimum the com- panies will get the average net revenue of 1935, 1936 and 1937, which itself implies a very satisfactory scale of dm- dend. There will also be provision for the companies to par- ticipate in war-time improvement. Great Western ordinary, L.M.S. ordinary, L.N.E.R. second preference, and Southern deferred should all have speculative possibilities. It is readily calculable that even the basic minimum under this agreement will enable dividends to be paid on all these stocks. Allowing for participation, I should expect earnings of 41 per cent. of Great Western ordinary, 2 per cent. on both L.M.S. ordinary and L.N.E.R. second preference, and of If per cent. on Southern deferred in the current year.
Previous page
