C.P.R. PREFERENCE POSITION
Now that we have detailed figures of the Canadian Pacific's earnings, I cannot say that as a preference share- holder I should feel at all satisfied about the passing of the dividend. Net operating earnings rose last year from 20,752,466 dollars to 28,523,819 dollars, and even though other income was about 600,000 dollars less at 6,764,851 dollars, the net balance transferred to profit and loss account, after covering fixed charges, including the " Soo " guarantee, was 9,782,148 dollars. This is the figure which matters when we think about the chances of a preference dividend. The full 4 per cent. rate costs only some 5,500,000 dollars. Why was nothing paid?
Perhaps some importance should be attached to the increase from 1,498,382 to 5,398,296 dollars in the deduc- tions for " loss on lines abandoned, &c.," and miscellaneous net debits, but I seem to remember that the chairman has gone out of his way in the past to explain that these items are not allowed to affect dividend policy. In any event, the total profit and loss balance which is being carried forward, after meeting those items, has risen from 136,969,650 dollars to the formidable total of 141,353,502 dollars. In the light of figures such as these it is obvious that payment of the full preference dividend would not have involved the slightest strain on liquid resources. The board's decision was clearly prompted, therefore, by policy considerations. What these were we shall not know until the annual meet- ing, but in the meantime shareholders will notice that gross traffics have already risen by 5,266,000 dollars this year. C.P.R. preference, at £432, is well worth holding, and, as a lock-up speculation, the common, at 8* dollars, are still attractive despite their recent rise.
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