New-York tribune., 1905-01-22
The Financial World.

we feach now period OF financial aceor,..
wherein materially larger dividend disbr--I
ments figure as fOrceful factors-the past 49,.
market having been directly under snc,
huence.
Significance Of such current dividend ac,,..
lies not so much in the actual amount ai,.-r
uted as in the evidence that Conservative -,
road management feels warranted IN sr,h,-,''-
upon the policy OF larger allotment OF proa,, =
shareholders. Take. for example. such ,v,a.,.
differing aphicaUy and otherv,-.
as Reading and Illinois Central Reaasn.
inauguTates common stock dividends and I1t,oe
Central Increases its regular rate Reading .
primarily an anthracite coal road althou1b -
course. conducting also a large general traes..
Illinois Central is a Western and Soutbe-, ,~,
tenn. doing business between Omaha west ana
New Orleans south. Each shares IN the pr,,
perity common to the whole country. each giv.
ing substantial testimony to that effect. Tba,
this expanding dividend policy win be purSpss
by other systems is Inevitable; accumulation n,
surpluses has been the disting gushing feature ~
recent years-tenaciousIy clung to. under ~.
American policy OF building up reserves agaius+
possible bad times; and these surpluses are IN
the majority OF proft-earning systems becoming
actually unwieIdy. leaving no recourse save dis
trtbution to shareholders
Discussion Of Congressional action on tia
railroad question keeps Wall Street busy: bur
the main point seems to be missed. II f. GER
tain from development already rnatured thar
any action that may be taken viii not be IN
spirit OF hostility to the railroads. There Is uo
complaint from any quarter that average freight
rates are excessive. the sole criticism being that
certain shipping interests are favored by re-
bates Public opinion and the opinion OF trained
railroad men is in accord upon this question
united in the idea that legislation which could
effectively put a quietUs to the rebate system
would be wholesome. Assuming that such en-
actment shall be effected. what would the re-
suit be upon the railroads? Unquestionably. a
stability OF rates. with favor to none, enhancing
earning power and increasing revenue-surey
desirable result. Under this National Adninis-
tration and the Congress coming into power
after March it is utterly absurd 10 imagine
that there will be any anarchistic or socialistfc
assault upon railroads or other corporations.
The whole question can be safely left 70 the
wisdom Of our lawmakers Wall Street pessi-
mists who seek 70 make discussion OF this ques-
ton an engine for depression Of values are not
in accord with enlightened public sentiment nor
with existing facts. When the matter has come
to a conclusion our railroads and industrial
companies will be found IN better and clearer
pOsition-abIe to reap without disturbance the
legitimate profits TO which they are entitled.
As recorded In the opening paragraph OF this
review. Illinois Central figures conspicuousIy in
the news events OF the financial world this week
by advancing it's dividend rate to where 1t may
now be considered as upon a : per cent basis
the dividend declaration taking the form OF a
regular semi-annual per cent plus Z OF I per
cent extra; but it is recognized that Illinois
CentraFs official conduct never trihes-and SET
tied per cent rate may in fair conservatism be
depended upon.
1t is a wonderful record that leads UP TO this
establishment OF the Z per cent rate. All man
ner Of professional criticism loses force when
confronted with Illinois Centra; accomplishment.
Take but the present fiscal year starting last
July. for consideration and note what is simply
phenomenal
Gross earnings made new high records for Au-
gust. September. October and November while
net earnings rose to new high records for en-
months July to November iHclusive-Octoosr
gross and net both being the largest for any
month in the company's history. Here is an
iIIuminative exhibit:
Increase in groS. for five months. 81 f5t. .261
Decrease in expenses for five months. IIL4t
Increase in net for five months 81 90. I+1
Increase in net alone equals 2.O2 per cent on
the total amount of capital stock Of S9J.t4OOt"
The company never had so prosperous period
this fiscal year running
The first semi-annual dividend at 3 per cent
was paid out OF the earnings of the fiscal year
1900, Compare net charges-shOwing an actual
decrease for 1904 against 1900:
1900. 1903. Changes
Charges and rents SC u! los SCISSORS Dec S4sl@s
Miscellaneous Income 24ilslO 2T16549 Inc %s+'ss
Net charges......... .Ssss5 29s So 229525 s75aT72
In 1900 SIS. 100000 dividends were paid on S6o-
100000 stock. and S2,416.674 allotted TO better
ments. In 1904 s.. .TO2, 400 dividends were paid
on $95.O40.OOO and $2.579329 devoted to better
ments.
The Il OF 1 per cent extra diviaend now de-
clared could be paid out OF less than One-fOurth
OF the Increase in profits for the five months
July to November-Of the present fiscal year
BY another comparison these five months net
earnings show an increase Of $3.01SS4S-Or .
per cent over the total for the same period four