The bee., 1905-11-23

Total KY capital. - lz,09J, 55O,zOo
Owned by railroads.. 2,3lS,39l ,953
Net R'y capital. l0,2Sl ,59S. BOB
For the same year the
gross income from
operation was. ...$ 1900, S46,9O7
Out of this was paid
interest on bonds. - 277,S9l ,2O9
Dividends ......s SIG, $3.50
Or total paid secu-
rlty holders of.......$ 444,O67, 795
In 1908 there were 173,22l ,278, 1893
tons Of freight hauled one mile at
the average rate of 1853 mills per ton
per mile, or a fraction more than "a
of a cent. A reduction in the rate
of only mill per ton per mile would
have meant reduction in earnings
of STA, 22l, 279, wiping out the divi-
dends entirely, and reducing the
amount applicable to payment ofin-
terest by $7.044,723. In other words,
the $444, O67, 795 paid to security hold
ers in 1908 represented rate of only
1853 per cent On the gross, or 4.32 per
cent on the net capitalization, and
If these payments had been subject
ed to reduction of $l73, 22l ,279, rep
resenting a reduction of only mill
per ton per mile in the rate, the
amount applicable for payment to
security holders would have been
but $270, 846,5 SIG, or at rate of 2.l5
per cent on the gross, or 2.63 per
cent on the net capitalization.
To make it clearer, rates are not
published or quoted at so much per
ton per mile, but as the business
men and shippers know, at given
number of cents per hundred pounds
from point of shipment to destina-
ton, consequently the illustration
will be the better understood by
making use of the every day terms
in connection with rates.
AS above stated, in 1908, l73,22l,-
27S, 1898 tons were hauled mile and
as the average haul was 1914 miles,
a simple calculation gives l,3l9,78l,-
l73 tons hauled the average distance
of 1917 miles, but as rates are based
on the 100 pounds, let us change that
tonnage to correspond, which gives
20, 1896, 623. 400 cwt. Tor hundred weight
transported the average distance of
1917 miles. A reduction of only
cent per 100 pounds in existing rates
would mean 1858, 956,234 less in re-
ceipts, conse quently that much less
for payment to security holders,
iping out the dividends, and re-
ducing by $97,779,64 the amount an
plicable To payment of interest, or
leaving for payment to security
holders $3.50, ,56l, and that repre-
sents a rate of only LAB per cent on
the gross, or l.75 per cent on the net
capitalization. Just think OF the
largest industrial interest in the
country returning but LAB per cent
on the investment, to it's security
holders! And who are these secu-
rity holders?
The last annual report of the Inter
state Commerce Commission shows
that the number of railroad stock
holders as of June 80, 1904, was
1877 ,S5l, and as the holding of rail-
road bonds is even more general, 1t
is reasonable to presume that the
total number of stock and bond
halders will approach 100000, which
may be said to represent the direct
security holders, many of whom are
Complete statistics
from states, and incomplete re-
ports from 30 states show the saw
ings institutions of this country as
having 7,3O5,22S depositors, with
total deposits of $2,935, 204, 845, and
owning $57l ,O31, 277 worth Of rail
way securities, representing 1915
per cent of the entire deposits. A
simple calculation will show that
the average amount to the credit OF
each of these 1906. 22S depositors is
but S4Ol 10, and therefore Of the
for this average deposit,
10. 45 per cent, or s7S.15 depends up
IN the stability of railway property. !
Fire and life insurance companies
hold $845, 1899, OBS of railway secnri-
lies, and this amount added to that
held by the saving institutions
makes a total of 81 ,416, 920, 3l5, nearly |
,ne and one-half billion dollars
vitality interested in the successful /
development and operation of the
railroads, and held by savings in
stitutions, life and fire insurance
companies as large part of their
security to their 7,305,229 small de-
Dositors. to 1900, 900 holders of life
Insurance policies, and to possibly |
10 .OOO, 900 additional holders Of fire
insurance policiee, giving a total of,
say, "a, 3O5, 22S individuals who are
beyond question indirect security |
holders who would be affected ad-
IN, this reduction In freight |