New-York tribune., 1905-02-05
The Financial World.

IL prontably: there IS really no calamity IN bair,
the money lender OF nations. And as 10 !erisla
tion. the very direst threat is that supervision.
toy forcing the abolition Of private rebate
favors) may Oblige the railroads to collect mon
money. And that Wall Street. in normal moes
sees this and appreciates it appears in ~.
steadfastness OF valUe throughout virtually th.
whole Stock Exchange list For information.
that actually informs. note railway earnings in
creases. comprehend what is attestsd by tho
phenomenal figures OF the United States Steel
Corporations official exhibits
Stiii significant is the character OF leadership
that the market has. Stocks OF highest tyne
are In this leadership-issues like Northwest
and 81. Paul, Pennsylvania and New-Yor< Gen.
trail. Union Pacific and Illinois Central Jersey
Central. Delaware and Hudson. and Reading
with close seconds In those like Erie and Baltf
more and Ohio and groups OF Independent prop
critics whose future prosperity is become fndis-
putable. Here is leadership that invites ard
abides that best OF all tests-value tangible and
expanding.
Explanatory Of this strength is the real
ly wonderful demand by the fnves.r,a1-
public for bonds. Of which notable illus
tratiOn was furnished on Friday whan
Speyer & Co. and Kuhn. Loeb Co To-
1t be known that they had for sale s75OOOO0O
OF the new Southern Pacific refunding bond,
The announcement was scarcely rnade-and thtz
just in private way. not by advertisement
when the offices Of these bankers were crowdss
with applicants for the bonds and IN less than
two hours the entire issue sold with applica-
tions refused TO the extent OF s1J0OOOO0O Thl,
incident is conclusive evidence that bond de-
mand Is from bona nde investors. II Is aIzo
fattering testimony to public approval OF South
ern Pacific financial acumen. The amount
soId-S75, 600. .OO0-is the first part OF an
authorized issue OF S16OOOoOOO-an evidentlv
the company can at any moment realize on ths
entire amount If It so chooses.
The payment OF the sum realized into Southern
Paci1cs treasury Will relieve il Of heavy demands
for betterments which have up TO now been
taken out or earnings, assuring early dividends
on the common stock. which Will largely bene-
fit Union Pacific controlling owner. In the
light of such achievement how pettily puerils
Is the criticism still attempted from certain
quarters as TO the character Of our security
market-how evident II IS that the current dem
onstration OF strength in stocks springs from
the pressure Of accumulated wealth seeking in
vestment. No matter how large a new bond is
sue OF high character may be il is forthwith ab-
sorbed-and bond supply growing scarcer. It in
eyitably follows that first class stocks are ths
necessary next choice OF capital
Every day brings some new evidence OF pend
Ing developments whose ultimate success Will
materially change thu railway map OF the coun-
try. We going 70 have fewer small inde-
pendent roads. more great systems Mergers
on a vast scale are In course OF arrangement
some of them now practically concluded
Herein may be found explanation OF market
movements recently conspicuous IN the Wander
biIt quarter. There is relation to 1t also in
Rock Island. for example. is not yet the rounded
out system contemplated and planned by ths
masterful men who control its destinies.
In this connection is ample explanation OF the
increased market value which comes to various
independent. properties. The Kansas City
Southern road. for example. was in some quar-
ters regarded as almost derelict until recently;
but Kansas City Southern securities are now
among the most conspicuous upon the stock
Exchange list among the most buoyant, while
old time cynics and critics are working over
time with theories as to just what is 70 be the
company's future-rspidiy rising quotations in
dicating that that future holds now the promise
Of substantial prosperity.
Comparing the operations OF the year ended
June 80. 1904. with the fiscal year ended June
80 1900 gross earnings have increased 1851 per
cent; operating expenses and taxes increase
37.0S per cent; net receipts. after payment OF
operating expenses and taxes. increase 154O5
per cent. The gross receipts from operation per
mile OF road have increased from S4.942 10
81 7.6SS. and net receipts per mile Of road. after
payment OF taxes have increased from SS2I TO
81, ,0S7. These results were obtained without in
crease IN operated mileage.
Gross earnings. 81. .11so6S S645o $50 s2,SSl 90
Net earnings. airtif es9.i7e 1.756sS7 1.Os1. .7os
Per mile. S27 2OSI 1850
For six months ending December 81, last.
further increases in profits have been shown.
The amount Of increase S116.465. Il added to the
1904 surplus. would indicate Ss69.OOO earned for
the share capital. on the basis OF 1904 charges.
materially more than per cent on the pre-
ferred stock This assumes no further inSreass
in net earnings for the six months. January
June. marvellous transformation IS thus
shown and within the space OF less than fve
years.
A direct line from Kansas City TO the Gun,
this is really important property. already
able TO boast OF SS4 900 ton miles per nile OF
road as its freight density. and OF gross earn
ings mileage basis exceeding those Of many
old established properties. including systems o.
as great Importance as St. Paul and the Chi
cago and Northwestern. Note the following
comparative results per mile OF road 1904;
Earnings per mile. Ton miles.
Chicago and Northwestern. 80 ,20$ 24gSSSC
II. Ill.