ABSTRACT
There is every chance for fierce disputes at just this point; for in cases of bankruptcy the owners of roads on the main lines naturally look upon their lien as paramount to obligations of any kind due to subsidiary companies; and technically they are of course right. And yet the obligations of subsidiary companies when based upon values which by custom have come to have a substantial basis, are safe investments; though those values ought to be established through accurate statistics from the very beginning. Sometimes controlling companies in making up their accounts for the year omitted those branch-line losses from their income statements, charging them instead as "loans" to subsidiary companies or as "investments" in branch-line bonds and stocks. In a large number of cases it is well for the investor to look a little further and for the company to ask him to do so.
