Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-08-14
SOME B. & O. HISTORY
RECALLED BY RECENT ADVANCE
IN DIVIDEND RATE.

The actfOn the bdilllHolt oAii'
Railroad Company. at the July meeting. In
advancing it's dividend rate upon common
stock issues from to per cent per
annum, tends to recall the untoward aspect
of the company's affairs prevailing less than
decade ago. The failure then to meet the
interest upon the bond issue. the complete
financial collapse, in fact, caused grave con-
Germ for the future of the company, which
naturally. through It's historical associa-
tions, held a high place In public esteem.
That bankruptcy. which made possible the
determination of the barnacles of half a
century should prove one of the proverbiai
blessings in disguise was not fOreshadowed.
On the contrary, there was disposition
manifested in leading financial circles to
ignore contingencies as regarded the b. q
O., throwing Messrs Cowen and Murray,
the receivers. largely upon their own re-
sources of mind and experience in working
out the company's salvation. Both men
were resourceful, the one In the ways of the
law and the other in the naturalization or
revenue, that greatest Of essentials In as
surfing railroad prosperity.
Established Progressive Policy.
The strength of the contention that to do
business the wherewith must be provided
led to the establishing of precedent which
has important bearing upon present and fu-
We're expended upon the B. & o. while 1t
was under the direction of the court. The
road and it's equipment, instead Of deterior-
ating, improved; business keeping pace with
the progressive policy pursued. AS con-
sequence, there was sale under fOreclOS-
ure; the creditors in interest being satisfied
to leave we'll enough alone, in SO far as the
property reverting back to the direction OF
its former executives. when the release from
the laws jurisdiction and the reorganiZa-
ton was effected.
Practically. the administration remained
unchanged through the concentration OF cir
cumstances that characterized the time
from before to after the intervention OF the
courts in the companys affairs. The presi-
dent and vice president became the receiv-
ers. yet, to all intent and purposes, con-
tinued as formerly. to resume in fact, as in
name, their respective positions.
Results of Policy.
The fourteen and a half millions expend-
iture for additional motive power and roll
ing stock. ordered some time ago, carried
the outlay for equipment and betterments
generally to something like hundred and
thirty millions since the bankruptcy period.
The earnings have so increased meantime
as to permit of some twenty-five millions
of the total being taken from them, or,
added to operating expenses, rather than
going to the swelling Of capital account,
OF eighty-odd millions spent the calendar
millions were charged off to income and OPP
eration-five millions to the latter. The
average annual increase of capital, for the
six-year period indicated, of three thou
sand dollars a mile was two thousand dol
lars less than the average net earnings per
mile, and the net income per mile was equal
to the charge to capital per mile.
The money was coming in to OFFSET that
which was going out, as well as to compen-
safe for such was being made an added
liability. A comparison with the average
of the preceding six-year period shows the
increased net earnings from operation per
mile to have been equal to sixty-odd per
cent of the average charge to capital per
mile. The augmented revenue returning
five-eiRhths of the expenditure as the latter
was being made.
Capital Account Increased.
The company's capital account as a whole
greatly increased 1t averaged a hundred
and eight thousand dollars a mile in 1904
to seventy thousand In 1896. The earlier
year II per cent was in bonds and - per
cent in stock. preferred and common The
latter year little more than half-56 per
cent-was In bonds and a per cent IN
stock The increase in bonds per mile was
ten thousand dollars, and the interest
charges. including rentals which have been
capitalized, were less per mile by IL per
cent in 1904 than in 1895.
This showing indicated that, coupled with
the financial ability displayed in placing the
securities. there was corresponding Keen
ness in directing operation to profit to the
fullest from the increas ed business. The
figures show an increase in net earnings
from operation per mile of 81 per cent.
Tonnage with its dynamic force in the up
lift of earnings was the keynote of the nine
year advance Doubled In volume. had the
rate per ton per mile in 1904 increased over
1896 uuapruple the ratio 1t actually de-
creased, the gross earnings from Freight
last year would have nearly trebled. The
lessening in the rate of a little over quar-
ter of mill per ton per mile, as was the
case in 1904. assumed large proportions
when eight and a quarter billions became
the multiple; for that total represented the
tonnage mileage.
Over $40, oOO, 900 Net Earnings.
With freight earnings approximating
fifty millions. or. more than twelve thou
sand dollars per mile. a gross income from
all sources of sixty EIGHT millions, or up
ward of seventeen thousand dollars a mile.
and q net income of thirty -one hundred dob
lars per mile, the general contrast In 1861
to existing conditions nine years before Ieft
very small room for carping over the situa-
ton on the part of either the company or
the public. At least such would be the
popular impression. And one. too. not TO
be discounted In the least by the showing
lust made public of the results of the fiscal
year ending with June. Gross earnings