The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-09-04

La Rue-Were not the passenger earnings in
GUIDED IN the statement of 1893 considerably
Fair?
Lansing-Yes. There is no doubt that was
the means OF considerable revenue. That was
commencing in the early part of the year.
Probably that may account chiefly for portion
OF the decrease in 1894
La Rue-I estimated it at 100000 to
moneys than railroad fares.
Lansing-There was an actual decrease of
mileage OF passengers OF about per cent The The
number OF passengers carried one mile in 1898
was $4,000, 900, and in 1894 the number
was 507 100000, decrease of 100000.
There was decrease in the local business also.
1t is not great compared with the freight, but
1T affects the results. There was decrease
also IN expenditures, as have already shown.
rates of 1893 had been received in the passenger
traffic OF 1884 the earnings for 1894 would have
been $50, 900 more than they were. That is
the effect of the decrease of 296 per cent in
the rates per mile. II the average freight rates
OF 1893 had been applied to 1894 the freight
earnings OF 1894 would have been greater than
they were by 81, 1877 600 The reduction of
the net income in 1894 OF Sc, 276 900 is very
striking amount, and might raise the question
whether 1T is due to abnormal conditions, that
there would be return with better conditions
to an improvement in income and profit. If
this does not follow to some extent it will
certainly place the financial affairs of the COM
pany in critical condition. But the real
depression is due to the general depression of
the country. During the period of prosperity
previous to 1891, there were thousands of
miles OF railroads constructed each year, and
tor the last three years there has been de-
crease down to practically nothing.
Mr.. La Rue wished to know if he did not
count in the decrease of the earnings the
decrease of wheat, which would amount
to nearly $1,000, GOO, and Mr.. Lansing re-
piled that the decrease on that line for the
year 1895 was due to the application of the
new wheat rates adopted on December %,
1894, which would make further decrease
for 1895. But Mr.. La Rue insisted that
the company would have the benefit
of the increase in the crop, and Mr..
Lansing admitted that that would increase
the net result. Then Mr.. Smurr urged
that the Western classification took effect
in 1894 and that caused shrlnkage. Then
Mr.. Lansing started in afresh
You might infer from the reduction in 1894
that was an unusual year, so | have taken
figures to show as far as possible the effect on
the first six months OF 1895, but without COM
parison with other periods, showing only net
results, which presents deficit of 81 ,476 900.
La Rue-But the first six months of a year
does not average so great in revenue as the last
six months.
Lansing-That is true, and some of the ex-
penditures are irregular.
La Rue-They are greater for the first six
months. You have 10 fight snow.
Lansing-That will hold the expenditures
about equally divided The earnings are
usually not SO large III the hrSt SIX mOntnS.
The company hopes it will be able to overcome
the deficit for this year, but that depends upon
circumstances and to some extent on the action
of this commission. During the last few years
the earnings have been falling off and every
effort has been made to reduce the expenses.
But ii is increasing expenses now and has been
for the first six months of this present year. 1t
has been renewing old rolling stock to a large
extent and furnishing locomotive power OF
greater capacity and improved cars.
La Rue-If you expended a considerable of
In m
then instead of the bondholders getting divi-
dends they would get better security.
Lansing-Yes, it is necessary to maintain the
property in frst-class condition.
Attorney Martln-lo maintain the road at
all, you must keep up the interest on your
bonds?
La Rue-Thet is true, but when the surplus
is expended in improvements you have no
chance TO reduce rates.
Lansing-That is the proper disposition to
make OF surplus of that kind
La Rue--Suppose the bridge being, con-
structed at sacramento cost 1900 TO build,
the two counties appropriated $40, 900 toward
the construction, how do you account for that
appropriation in your reports?
Lansing-Under the decision of the Federal
courts it would be charged against the income
for the year..
Mr.. Lansing entered into a lengthy ex-
planation of the division of expenses of
terminal facilities, such as union depots
oDerated by depot company for the bene-
fit of several roads, when Dr. Stanton asked:
The interest is increasing on the bonded in
debtedness, is it not?
Lansng-No; 1t is probably less than it was
seven or eight years ago, though it has in 1894
increased over 1898 by $4,000, due to the
acquisition of new lines by the Southern Pa
clfic on which bonds have been issued. For in
stance in 1891 there were All miles in 1892,
ATT miles; in 1898, 1859 miles; in 1894, 1875
miles. This increase OF sixteen miles of road
accounts for the increased interest on bonds.
Stanton That represents increase OF
$175, 900 in the interest?
Lansing-No; there is another cause for that,
which was doubtless due to some transactions
in the bonded debt OF the Central Pacific. do
not recall the detail OF that, but there has been
a transaction of that kind affecting some of the
issues OF the Central Pacific by which certain
bonds have been exchanged and new issue
made, exchanging for maturing bonds, and in
the collection OF interest for settlement there
would be unusual interest charged.
Mr.. Lansing then went into an explana-
ton of the law providing for the issuance
of bonds and interest, described the early
building of the Pacific system, admitted
that the land grant was a source of benefit,
and continued:
The Central Pacific now has 1860 miles of
road. On this road originally there was total
issue OF S75 867 900 in bonds, issued to differ
ent roads at different times. There has been
retired $15, 761 900, leaving outstanding $780,
100000 of all Central Pacific bonds, an aver
age OF $44 ,191 per mile. The lines in Callfor
MA wholly are Jne southern, 1917 miles OF
road; 800 miles in the Northern Railway, sd
miles in the Northern California Railway.
These are bonded at 1927 900, $25, 900 and
$4,000 per mile, respectively. The other
roads in this vicinity are Southern Pacific |
Railroad in Arizona, bonded at $25, 400 per
mile; Southern Pacific Railroad in New Mex |
leo at S24 ,445: Oregon and California, in Ore |
gon, at SIS, 800. Those amounts were required |
in the construction. The average rate of bonds |
issued for the road operated by the Southern
Pacific in the State of California is $29 225 per
mile. This includes the South Pacific Railway |
OF 104 miles, for which the bonds were issued |
at S52, 800 per mile This road was con- |
structed under the ownership of the late SEN |
ator Fair. 1t included the ferry system, which |
adds to the cost OF construction and main |
tenance.
great deal of expensive property was put |
on a mileage basis of 5000, 900 or 5000, 900, or |
perhaps 81 100000 per mile when singled out. |
The California Pacific is another, with bonded |
debt of $50 300 per mile, and is very impor- |
tant railroad in the system of these roads, be- |
cause it is intermediate between tie roads on |
both sides, having large traffic. This road was |
reorganlzed and the bonded debt exchanged |
for bonds at a lower rate of issue. Some at 3 |
per cent were exchanged for some as high as |
10 per cent, so the road has always been main |
tanned at high rate and will be until the
bonds are retired
The statement that roads could be built |
at $4,000, and that that was high rate |
IL,