The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1902-09-29
The SOO'S SHOWING
That Roads Annual Report Attracts
Generous Comment From the
Wall Street journal. ~
Classification Of Charges is Crit.
cized, but the Showing is
Good on Any Basis. :

Remarkable advances made by 500
stocks in the last year have attracted
much attention to the property, not only
from Minneapolis investors but from
strong eastern financial centers as well.
The Wall Street Journal devOteS much
space to comparison of annual figures
and follows it by this editorial analysis:
1.-THE total Increase in operating ex-
penses was approximately $SO3,O0 or
this, the increase in maintenance was
SAT-, ooo, and the increase in other ex-
pense was but $376,OO0. Thus, we have
the remarkable fact that the company Sc
cured gross gain Of $4,000 at an in
creased expense, excluding maintenance.
Of only about 5000. in other words, the
increased business cost but 10 per cent to
get so far as transportation expenses were
concerned. This is, Of course, a very as
founding result. 1t may be noted, more
over, that at the present time transporta-
ton. expense is only little over. rs per
cent of gross earnings. The 500 line must
evidently be regarded as one of the very
cheaply operated roads in the country.
whether maintenance expenses are
sufficiently charged at present may be
doubted. The maintenance of way al
lowances last year was less than $500 per
mile. We note that there was charged
to capital account during the year $140.-
900 for the difference in weight of new
This method of procedure is totally OPP
posed to the best modern practice in this
country. = - =. -
ut may do for England and possibly
Canada but it is totally out Of harmony
with conservative American practice.
The amount should have been charged to
maintenance of way account, increasing
that item to about 1926. 900 and disintshing
surplus correspondingly.
I'm equipment, maintenance expendi-
lures, moreover, it looks very much as If
allowances have been relatively small by
comparison with probable average needs.
The inventory would seem to call for
something over 100000 annually, while ex-
penses as charged were only S445,000.
Taking this with the maintenance of way
accounts, there is about $500, 900 that may
be called shortage, In average main
tenance requirements It. is' only fair to
note that, however, that there has been
charged against surplus income account
$500, 900 for Improvement fund, but 1t
looks as if the surplus of the years opera
lions should be reduced by at least $780,
900 to give a fair idea of the roads earn
ing capacity. On this basis the reported
surplus of 81, $50, SOL would be cut to about
81, 2S6 900, which would be equal to about
5 per cent earned on the common stock
for the year. We think it safe to say that
no larger earning capacity can safely, be
allowed the 500 line on last years basis.
This, Of course, is a very satisfactory
showing, everything considered, by COM
parison with previous years when the road
reported deficits.
1.-The management certainly ought to
change the roads policy with respect to
betterment and Improvement charges sc
| as to bring it into conformity with
American practice which in this respect
is admittedly the best practice that is
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