L.M.S. PROSPECTS
Sir Josiah Stamp's address to stockholders of the London, Midland and Scottish Railway is as communicative as ever, but it is rather more non-committal this year than last. On balance, however, Sir Josiah's optimism wins and in the light of current conditions I for one will be more than satisfied if his estimates for 1938 are fulfilled. On the question of the total volume of trade in prospect, which, after all, is the most important factor in the earnings equation, his conclusion is that although in particular industries 1938 will have difficulty in maintaining the 1937 results, trade over the company's system as a whole should be just about the same level as in 1937 and perhaps a little above it.
With this assumption as a background, Sir Josiah reminds us that the net financial results for 1938 will reflect the increase in rates in fares for a full year, against only three months in 1937, less a full year's wages increase, compared with only five months last year, and also less any general increase in the cost of supplies. To assess these factors accurately is scarcely possible but Stockholders will welcome the intimation that the company hopes to earn: and pay a rather higher dividend on its Ordinary stock this year than for 1937. In these days this is an encouraging conclusion, especially when it is reached by a chairman who is not given to indulging in sunshine talk. I still feel, however, that to maintain the 1937 revenue figures is not going to be easy and that an increase in the ordinary dividend is scarcely more than an even chance. As a slightly speculative invest- ment L.M.S. 1923 preference is surely under7valued in the light of Sir Josiah's survey. At 58 the yield is 61 per cent,
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