The times., 1898-07-03
PULLMAN TRUST PROFITS
Part of the Surplus Gains Are
to Be Divided.
A PARADOX1CAL STATEMENT
Alleged That Rather Than Have Its
Affairs Too Well known, the Cor
pGIatfon EndCavOrs to Keep Down
It's Profits-seme of the Expedients
Rescrtcd To.

There is to be division of part OF
the $50 600, 900 surplus profit of the pullman
trust. The fortunate holders of the stock
of the company, in addition to the regular
dividend of per cent yearly, are to De
given special dividend of $40 per snare
in August But this is not enough happi-
ness. Out OF the remaining immense sur
plus SIS. .O000 600 are 10 be distributed In the
form of new stock, giving every stock
holder one new share for every two tnat
he now owns. The company has not YET
decided what TO do with the millions OF
accumulated profits which stal will be re-
naming after the division has taken
place.
The Pullman trust Is one of the largest
and most enormously profitable corpora
tions In the world. 1t is one of the most
disliked. also. because the charges of the
company for its services are extortionate,
in the opinion of most persons, and be-
cause they are not reduced, despite the
profits that pile up so fast that their
handling is one of the greatest problems
of the company.
The facts about these profits are inter
esting and they are just coming TO light.
The company has done all it could 10
hide them, because of the objection that
some people have to corporations holding
Such large part of the worlds goods.
During the last few years the capital
stock of the Pullman trust has been in
creased one-half by the division of profits
in the form of new stock. 1t is now $50,
00O. 600. On this stock dividend has been
paid amounting to per cent annually
Despite all this, a tremendous surplus
has been accommodating.
There is another matter TO be taken
into account that is not contained IN THESE
| figures 1t is a somewhat paradoxical
statement, but nevertheless il is said TO
be an actual fact that the trust has done
! all it could to keep its profits down. The
| company has not desired to have its af-
! fairs too well known 10 the general pub
! lie and il has resorted to many eNpedients
! to hide the actual earnings. In 1895 the
/ company marked off $500, coo as depreeia-
/ ton on the market value of the securities
/ that il held. AT the same time there was
] $780, marked off as depreciation OF It's
/ equipment. In the next year half a mil
| lion dollars more was marked on the
/ books for the latter reason In 1897 an
| other million was charged to the same
| fictitious depreciation of equipment. The
| total of this account thus was consider
| ably over s., co., O0G in three years, or al
! most 10 per cent of the total cost of the
! equipment and franchises.
| When the last million had been marked
| off in this way, in 1897, there remained
| S27 502 s57 surplus profits. This is the last
| statement of surplus that has been made
| 1t is probable that 1t is very near $50, ,OoO,
! coo now The total capital stock is only
| $50 000 coo, so that the accommodating profit:
/ are very nearly equal to the capital stock
| This surplus is part cash-siX million:
| or more-part loans and part securitie:
| of other companies. There are over &c.
| O00, 600 in securities of the roads over which
| the Pullman cars run. 1t is said in sober
! earnest that the handling of this vas
amount of surplus in its various forms i.
| one of the most difficult and intricat.
problems that the company has to face.
| is financial maxim that IL is as hard Il
take care of surplus as it is of deficit
The method of disposing of the sur
plus taken by the company at its direct
ors' meeting last Thursday in Chicago Il
one of the favorite plans of corporations
overburdened with profits. The capita
stock is to be increased to s54, 900, ,000 New
stock will be issued to the amount of SIS,
600, 600, or half the present capitalization
This stock will be distributed to the pres
ent holders pro rata, SO that each holde
will receive one new share for every tW'
that he now possesses. The rate of divi
dend is to be changed to per cent instea'
of s, annually, for the present, but ther
is every reason to believe that the oil
rate will be resumed, as the company /
earning more than per cent on $54, 0G0, ,O0t
Pullman stock, with a par value of $40
| a share is now sold for over $780, 1t wa
$500 early last week, but the rumor of tn
division of the surplus caused people {
buy and the price went up in two day
sl2 share. This advance represents owe
81. 000, 900 profits for the holders of tn
stock in two days.
There are rumors of a combination be
tween the Pullman Company and tn
Wagner Car Company. The Wagner trus
is not believed to be such an immensel
profitable corporation as the Pullman bu
1t pays s per cent. yearly to its stock
! holders, and earns it, too. The combina
ton of the two concerns would reduc
expenses and make more profits. Such
combination is in line with the tendenc
of corporations everywhere.
B. & o. Favorite Route