The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-08-28
RAILROAD NEWS.
Practically All of Santa Fe Con-
Vertibles Change Hands.
Heavy Transactions Reported on
New York Stock Exchange.
PRICES AVERAGED 1O7.
n. Y. Post Discusses Probability
of 6 Per Cent Dividends.
Gossip and Matters of Interest
in Railroad Circles.
PRICES AVERAGED 1O7.

There was heavy movement on the
floor of the New York stock exchange
few days ago in the recent issue of
$50.OO0,0O0 per cent convertible
bonds of the Santa Fe. Sales aggre-
eating practically every bond of this
class issued were made at prices aver
aging above 1O7.
This activity is credited to the re-
port that Santa Fe common stock
may soon be placed upon a six per cent
basis, which, if true provides a good
reason for holders Of the bonds to
trade them in for their equivalent in
common stock of the company which
may be done at any time up to June
1, 1918. at the option of the holder.
It is not known in the west who
purchased the bonds on the New York
stock exchange, but 1t is known that
II they went to any one person or pool
for the purpose of Immediate con-
version into common stock, they may
play prominent part in the next
stockholders meeting, because the en-
tire issue converted into common
stock would represent one-fifth of the
entire voting stock of the company.
which If lined up with the holdings
recently acquired by the Standard Oil
crowd might make interesting de-
veIopments.
The New York Post is of the opinion
that Santa Fe common will not be
placed upon S per cent basis. The
Post says
Two railways have stood IN the
forefront of this weeks discussion and
prediction regarding increased divi-
dends. They are Pennsylvania and
the Atchison. Their case is worth ex-
aiming. That the Atchison has earn
ed enough, this past year, to pay 5
per cent or even 6 per cent. from the
surplus earnings, instead Of T. and to
do so without borrowing from past
surplus. there can be no doubt on
the basis Of the 1905 showing, allow
ing for the increase in fixed charges
from the new S50.0OOOOO outstand-
ing per cent convertible bonds. the
surplus applicable to dividends on the
common stock is equal to 10 y per
cent on the entire $1O1.955,0OO issue.
II the rate were increased from to
5 per cent, d surplus of five and half
millions would still remain to take IN
this years instalment Of the deben-
ture bonds and provide for improve
ments.
But one years surplus earnings do
not decide the question. The excuse
ment was that over $125.00O from
earnings has been spent in the past
eight years in demonstrating the sys-
tenn. and. aside from that. the com
pany has bonds available for addi-
lions. improvements and betternents.
ferent. Only 100000 a year for i'm
provements during ten years was pro-
vided in the reorganization of 1895.
Practically everything mortgage Bile
in the eompany's property is already
mortgaged, and the sale of any new
large block of stock is admitted to be
impracticable.
AS a result. the management Of the
company has had a continual struggle.
since reorganization. to modernize the
5000 miles of poorly built single
track road, provide the 100000
paid out to common stockholders dur
ing the past five years. and at the
same time keep abreast OF the ra pidly
developing territory served. If net
earnings for last year did show an in
crease over 1905 of s9,668,000 in gross
and $6.6SS, 600 in net, it should equal
" be remembered that when 1905 is
compared with 1902. Its gain of So
240.0 gross was offset by a decrease
of $2.467. 900 in net. Moreover the
100000 appropriated from the sur
plus of 1901 for improvements was
the last; no similar deductions have
since been made