The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1906-08-23
EARNINGS AND INCOME.

plunged into speculative frenzy. Eight
cen dollars share had been added to
the market quotations for Union Pa
cific before yesterdays buying wave
subsidized, and 6O3.1OO shares changed
hands. The business in all stocks ran
to the total of 2,529,OO0 shares, max
ing one of the big days of the ex-
change.
No dividend announcement ever
created such a stir. Stock market re-
solved in itself as to the recognition
therein that a time for greater re-
turns upon corporate investment has
arrived. 1t was an answer to the call
for higher dividends unheeded through
many months Of prosperity and larger
corporate earnings.
One of the extraordinary things in
practical finance in America has been
the difficulty, commented upon both
at home and abroad, of increasing ma
terially the return to investors in our
great and prosperous enterprises, says
the Minneapolis Journal. When it is
considered that activity could scarce
ly be greater, that the railroads have
nous earnings in prospect that our
steel mills are sold ahead and working
in nearly every line show record fig
ures and that prosperity and plenty are
everywhere in evidence, it would seem
that increased dividend payments
should long since have been the rule.
1t is true there are recent increases,
notably the payment of a dividend on
the common stock of the steel corpor-
alton, but until the Hartman roads
made their announcement the more
important response was wanting.
Ten years ago there were 1913
miles of railroad reporting gross earn
ings. Their total was $45S,249, 900. To-
day, of total mileage of 100000 roads
operating 1861 miles have reported
for the fiscal year ending June 80 and
their grand total reaches $941 ,429, 900.
A mere glance at the comparative
mileage and the earnings will show
that while the mileage crept up mod
erately earnings have bounded for
ward. Last year a mileage of 1892
was covered in reports to this date
with earnings of $91O,O27 900, and this
years total of about 5000 miles less
shows s31 100000 more earned.
| Three main reasons there are why
dividends were not increased. Greater
cost of operation, inability to float
new issues of bonds, and the turn
| ing back of earnings into repair or
| betterment expense.
| Every period of prosperity brings
good things to business men, brings
likewise it's influences upon the adj
verse side. If it were possible to do
the larger business now evidenced at
an expense proportionately the same
as in the days of smaller business
some years back, profits would be in
creased materially, but probably every
business man has felt in some degree
the creeping up of the percentage of
cost of operation. If this is true of
private business affairs it is true of the
great corporations.
1t has been impossible profitably to
float any large bond issues. Last month
about $25, 100000 in new bonds ap-
peared against an average of $95,000,-
900 for the month. This is not an
unhealthy sign; on the contrary, it
proves the activity of the country, and
evidences the demand for money.
The result of this has been shown
in the turning of large sums back into
industry and the railroads. There is
little doubt that the town of Gary,
with it's enormous steel plant now be-
!
an issue of 100000 in bonds were
the time propitious; but with condi-
lions as they are such an issue would
necessarily carry high rate Of inter-
est, putting a fixed obligation of
great size upon the company, or the
bonds would sell well below par when
offered. Hence the company is build
ing the plant as a workingman might
build himself house, paying for it
out of money received as it goes along.
Conservatism has marked the pro-
ceedings of the financial heads of the
most prosperous companies. There
was prosperity and profitable business,
but the operating expenses were
larger, and the future uncertain. To-
day, with big crops assured, there is
little uncertainty and the larger profits
are being distributed. This is prob
olo - \