Los Angeles daily herald., 1886-12-01


Proceeds from mis-
ceilane's land sales 9,S39 7,9OS
Profits on investm'ts
premiums etc .... 7l5,l75 ..-......
Reed from trustees
Kansas Pacific con-
sOlidated mortgage. 643,230 T5,o5o
Pacific Express Com
pany settlement old
contract ............ lll,o'o ..'.'..t..
Total income ....$ S.118.020 $7,060.006
The total expenditures of the entire
system, for nine months in 1856, was
SIS, ,429, 900; in 1885, $5,797,S34 Sur.
plus in 1856, 50, ,6SS, 927; in 1885, ST..
262, III; less United States requirements
$500, 900, S7S6,9 9S9; balance of sur
plus for 1886, 81, 1892, In COM
parison with the first nine months OF
1885 the gross earnings show an in
crease of $SSl ,O56, Or 4.S per cent. Pass
enger earnings show an increase of
$2Sl, ,30S, or &C per cent. Freight earn
ings show an increase Of $657,777, or
5.22 per cent. Mail earnings show a
decrease of SS740, or Ia per cent. Ex.
press earnings show decrease of $S663,
or |. 8 per cent, and miscellaneous earn
ings show decrease of $40, 625, or 1876
per cent. Operating expenses show an
increase of $l,lS9,020, or 10 per cent.
OF this Increase sos. .9l6 is the mainte.
nance of way expenses, and Sl53, $50 is
in the maintenance of car expenses. The
increase in the average number of miles
of the road under operation for the pc.
riod in question. is less than l per
cent. On the average road mileage
gross earning per mile rose from $4075
in 1885 to $4230 in 1886. an increase of
$l55, 38 per cent. The Pacific Coast
earnings, which in 1885 represented S.S
per cent. of the total earnings of the
system, fell off in 1856 to point where
they represented but IA per cent. of its
earnings. The earnings of the system
from traffic, interchanged with its
branch line system, have been kept for
twelve months and were in gross S5,.
22O, 93S, or about 80 per cent. of the
total earnings of the parent company.
As this traffic is done at less average
cost than its other business. The net
earnings from it are estimated at over
Sc 900, 900, or so per cent. of the total
net earnings. This is in addition to the
net earnings of the branch lines them
selves, after paying oil fixed charges,
which were $493, 459 for nine months OF
1886, and indicates the vital Importance
of this branch line system to the main
system.
Under the head of proposed legsla-
tion the report says it is admitted upon
all sides that the existing legislation is
insufficient and has utterly failed in
several respect and adds that legislation
has been suggested and is now before
Congress, which seems we'll adapted to
correct all the defects in existing laws
and to restore the government to its
true position, that of creditors. 1t debt
is not yet due and is too large for
its debtor to pay Immediately if it were.
Meanwhile its present security is insult
ffcient, but the debtor has additional
securities which may be pledged and
solvent business capable of paying the
entire interest and part of the principal
each year, if he can only be permitted
to conduct and manage it in accordance
with business principles and with the
same freedom enjoyed by his rivals. At
present the debtor is hampered both by
partnership and by cloud upon his
credit, caused by the attitude of the
Government. Surely it is to the great
advantage of both parties that this
state of affairs should cease; that a per-
manent adjustment should be made
which will give the Government ample
security for its debts, and pay the in
terest in full and part of the principal
each year, and give to the company free
dom of action in the management OF its
business and good credit in financial
centers. In discussions OF this matter
in Congress and in tie public press
there has been but one serious question
raised as to the proposed settlement;
that is, whether or not the additional
security offered by the company is suf'
ficiept. As the company withholds
nothing, but offers all that it has, and
as it shows the financial ability to pay
the entire interest aud portion OF the
principal every six months, it would
seem that the position of the Govern
meut is bettered, even at first, to the
utmost ability of its debtor to better 1t,
and that it will grow stronger from year
to year. But apart from this consider.
alton, the Board Of GovernmentDirectors
bslieve confidently that the additional
security which the company offers
will place the government beyond
peradventure of loss. This additional
security does not compromise simply the
stocks and bonds of its branch lines,
many of which standing alone may pos
sess but little value, but it is an absolute
lien upon the entire system of the main
line and feeders. 1t is the value of this
system as whole that is to be consid-
cred, and not that of fragmentary or
dismembered parts. 1t is transporta-
tion machine with large and growing
market for its products. Should the
company default upon a single payment
the government could foreclose and take
possession of this entire property, sub.
ject only to prior liens outstanding in
the hands of the public. Since the date
of our last report, January 30, 1856,
the condition OF the road has changed
for the better. The property as q
whole is of great and increasing value.
1t should also be borne in mind
that in few years the falling
due of 6, 7 and per cent bonds in very
large amounts will afford an opportunity
to effect very important savings of in
terest by the issue of new bonds at
much lower rates. Should the Govern.
ment, in any event, have to assume the
ownership Of the system, it could easily
take up all outstanding bonds with 3