The Topeka state journal., 1903-06-30
WILL CONTINUE DIVIDENDS.
Santa Fe Can Still Satisfy Holders of
Common Stock.

Chicago, June 3O-A decrease in the
net earnings OF the Santa Fe railwa Y
for the last year has led the more tlnliI
to suppose there is a pOssib bility OF that
road being ana bic to continue the pay
ment OF dividends on its common stock
A more careful examination of the
facts viii show that there is no imme-
dIate danger OF cessation Of these
payments.
The amount of interest charges ahea1
of the preferred stock at present
against the property may be taken al
Sl,ZUO per mile Of road. Dividends on
the preferred stock appear to call for Il
turtner sum ol say, 500 per mile, max
ing interest charges and preferred diVI =
dends together 1880, which for safety
may be placed at $4,000 Taxes and
rentals make $500 additional This
makes for first charges. including taxes
and preferred dividends, 81 300 per mile
Dividends at 4 per cent. on the common
VIII call for another $500 per mile max =
ing $500. This is the amount that ,he
company must provide from net earn
ings if dividends on the common are 10
be continued Sinking funds on the de.
bentures call for approximately $500
per MILE bringing the total up TO 50 100
Maintenance OF way will no doubt re,
cns'a 5000 per mile on a safe annual
average. The Santa F'e has good deal
OF mileage that does not require very
expensive maintenance. but to be safe
take the total requirements as stated
-fAei al NeAlft iANE OA EQGlDlACHt Oh lne I'll.
Nehtory at present owned ought not to
take in excess of $5.000000 as a maxi.
num- This would be say S700 mile
General expenses at SEQ per mile ere
ample. This makes total of $500 per
mile for maintenance and general eX~
penses, excluding conducting transpOs~
tation. The latter item will proba bly,
not absorb more than 81 per cent. Of
gross earnings in the fiscal year jus.
ending, and it is probably safe to reck
on q per cent. the raDs.e.serllent
From this it appears that 81 900 per
mile is 50 per cent. of the total gross
earnings per mile required to pay all
liked charges. including sinking fund,
all preferred dividends, all common div,
ldends and full maintenance charges Oh
the property. The indicated amount OF
gross earnings. therefore, is sometime
less than $1,000 per mile Let it be re .
membered, however, that this includes
provisions for the payment every yeak
of S2,5O0,0O0 in retirement of funded
debt The appropriation for this pur-
pose, While 1t is, no doubt, strict re-
quIement of the mortgage, is never
tneIeSS IautamOunt to an apprOpriat ton
of income for the Improvement of tie
property Therefore. with ST 600 Dec
mile gross earnings. the Santa Fne could
beyond doubt pay the present dividend
on the common stock and set aside a
additional out of earnings for the re-
payment of capital
The gross earnings per mile Of the
Santa F'e for the current fiscal year will
IN all prOba bility be ia the neighbor-
mood OF $500 per mile The Santa Fe
consequently could stand a reduction
OF 10 per cent at the least from the
present gross earnings per mile with
out having any difficulty in paying the
dividend on the common stock n
could probably stand a reduction OF
lz1s per cent and still take care of
every thing, including sinking funds.