HOME RAILWAY PROSPECTS
My hopeful view of the home railway dividend prospect strengthened by the chairmen's speeches at the annual meeti It is now made clear beyond any doubt, not merely that railway directorates have decided to regard war damage liab' as " essentially a post-war problem," but that it is not intend to make any substantial transfers to reserve during the against any liabilities under this head that may accrue. obviously means that the dividend rates recently announced f 1941 can be regarded as safe for the currency of the ren agreement, i.e., for the duration of the war, and one year after.
One may also read into the speeches that the post-war pros which is perhaps the source of most worry to many poten. buyers of railway stocks, is less discouraging than the pessi suggest. For one thing, the railways' " standard revenue " been " noted " in the war-time agreement, which also prov that before the end of control time will be given for the neces adjustment of charges to expenses. Sir Thomas Royden, ch man of the L.M.S., also refers to obligations assumed by Government, which may provide some recompense after the for the retention by the Government of " a substantial pr tion " of railway profits during the war. Here, by the way, official confirmation of the view I put forward a fortnight that last year's net revenue was much above the rental fi leaving a substantial surplus for the Government. Against background home rail junior stocks such as L.M.S. ordinary 18 and L.N.E.R. second preference at 19+ look absurdly u valued by comparison with the general run of industrial ord. shares. Yields of anything from to to 12+ per cent. ridiculously high in relation to the risks.
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