The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-03-27

should be men whose interests as citizens,
as producers and as consumers were greater
than their interests as investors
Hence the little accumulations upon
which widows and orphans depend for
support should not be put into this stock,
nor should any man pinch his family to
make subscription. 1t is essentially a
fighting stock, and should be owned by
people who can afford to take chances in
using it to club the head of monopoly
That does not mean rich people. The
money wasted by workingmen, clerks and
small tradesmen on lottery tickets, cigar
cites and drinks would build the road.
There is hardly storekeeper in town who
could not afford to take at least one share
of stock merely for the sake of the in
creased business he would gain from the
enterprise. An unmarried workman with
500 for which he had no immediate use
could help to insure the permanence of his
job by helping to build road which would
keep his factory open and reopen others
that are now closed.
The interest paid by the savings banks
on 500 is from 81 to S. a year. There is
every reason to believe that the dividends
on San Joaquin Valley stock will exceed
that from the start, but if they should not,
what of it? Is there anybody in San
Francisco to whom the prosperity of the
| city and State is not worth So year? The
profit on the sale of one ordinary suit of
clothes, or half dozen pairs of shoes. or
two or three tons of coal, would make it
up to the merchant. Two days wages
would return it to the workingman, or one
days to the more highly skilled worker,
who is most likely to be thrown out of en-
ployment in dull times There are mer-
chants in San Francisco who do not make
sales enough to pay their rent, and work
ers who have not had steady employment
for six months out of the. year in the past
five years. If the construction of the new
railroad brought them thriving business
and permanent work they would have
reason to consider the investment profit
able, whether the nominal dividends were
S. per share, or $40. or nothing.
But it is not at all likely that the invest
ors will have to call on their philosophy
even to this extent. The only thing that
can make the valley railroad stock unpro-
fitable, even from the point of view of
direct returns, is a cut-throat war of rates
on the part of the Southern Pacific, and
such war would SO stimulate the business
of San Francisco and the State as to make
up a dozen times over any loss the stock
holders in the new road might suffer from
temporary Suspension of dividends. Incl
dentally, too, it would mean the bank
ruptcy ofthe Southern Pacific. With interest
amounting to about 81 200 600 year to pay
on the bonds of its lines in the San
Joaquin Valley the old monopoly would
be at fatal disadvantage in fighting new
road built at bedrock prices and free from
debt.
As rule the operating expenses of
] American railroads amount to little over
half their gross receipts. Then come fixed
charges, principally interest on bonds, and
! finally dividends on stock. 1t is a very
extravagantly built or badly managed road
that cannot pay the interest on its bonds
after meeting its operating expenses. The
majority have something left over for divi-
dends on stocks, although the stock is
chiefly water. But in the case of the San
Joaquin Valley road everything above the
operating expenses will be available for
i dividends, provided the people accept the
invitation to subscribe for the full amount
of stock and thus render bond issue un-
necessary. The route proposed is one that
| will render the cost OF maintenance light
| ana the margin between expenditures and
| receipts is thus sufficient to cover any con-
ingency thtat can now be foreseen.
1t Is not likely that the stock of the new
! line will ever sell at less than par. If it
should, all the lessons of experience would
| go for nothing. There is no railroad enter
! prise in the Union that has been launched
under such favorable conditions. The
! route of the new line lies through a coun-
! try of which every mile is productive.
Business does not have to be created-it is
waiting and clamoring to be accepted.
Materials are at the lowest figures ever
known, and rights of way, depot sites and
terminal facilities are offered for nothing.
All along the route the good will of the
| public offers voluntarily patronage for
which an ordinary road would have to fish
| with expensive bait.
| In thie ;cnua nf 4Lo .lnall,, a. 4ALa..nL: