Los Angeles herald., 1906-08-09
SOUTHERN PACIFIC
SPENDS MILLIONS
MORE THAN S150,00O,000 IN
SIX YEARS
Statistics Show That for Two Decades
Systems Surplus Earnings
Have Been Spent In
Modernizlng

The Santa Fe, the Union Pacific and
the Northern Pacific have each re-
ceived fresh funds several times
through reorganzations, and 1t Is
largely through these methods that
they have been modernized.
The Southern Pacific, however, has
carried it's original cost since its cre-
alton in 1885, and during the past two
decades virtually every dollar of its
surplus earnings have in one form or
another gone back into the property
and the $150,000,000 to S199, 100000 stock
that has been outstanding has never
received a dollar in dividends. The
motto of the company has been:
"Modernize the property from earn
ings."
With the passing of c. P. Hunting
ton II was believed that the chances
of dividends became better, but the
Huntington policy of modernizing the
property from earnings has been in
tensfied under the Hartman rule. Be
cause of heavy expeditures in the
Huntington regime the property was
in fair shape when the Hartman in
terests took control and they are said
to have expressed their belief that
100000 900 would bring the property up
to the standard of modern transcon-
tinentals.
Since 1900
The following table will give some
idea of the money that has gone into
the Southern Pacific since 1900, the
year before the Hartman interests
took control:
Interest bearing and funded
debt inc. (abouO .......$ 46,000,0OO
Preferred stock increased. 100000 900
Common stock increased. 17,11O
Receipts from land sales
Surplus earnings including
estimates for 1906 (about) 62,S00.000
Total s153,S17,O 900
The sale of securities, surplus earn
ings and receipts from land sales,
which went to cancel bonds, have ap-
parently supplied the Southern Pacific
with over $150,000,000 cash in the past
six years, for acquisitions, bettermentS
improvements etc. And this is not all.
Almost consistently during the past
decade the Southern Pacific has led the
American ranscontinentals in point of
liberality of maintenance and many
Improvements have been charged this
way.
Some Results
Some of the results of this money
are shown in:
First-Increase in mileage of 1893
miles.
Second-There were but 1S5 miles of
track laid with S0-pound rails in 1900;
June 80, 1905, there were 2728 miles so
laid. The weight of rails in the South
ern Pacific is relatively heavier than
in any of the other transcontinentals
excepting the Union Pacific.
Third-Four hundred and eighty-six
locomotives have been added and the
average weight and power of locomo-
tives has been greatly increased.
Fourth-Three hundred and twenty
seven cars have been added and the
average capacity per car has been in
creased 81 tons.
Sixth-There has been a direct finan-
cial benefit, viz:
Current assets. including
bonds. cash accounts. ad
VanceS, etc, increased $S4 ,S70,6S9 |
Current liabilities increased. 2S,142,S19 |
Net increase in current
assets .......... .$56,72S,361 |
In 1900 current assets were not suffi-
cient to balance current liabilities.
Improvements
Some operating and other improve
ments in the Southern Pacific are
shown below:
1906. 1901.
Tons carried .... 10, 1860, ,79O 12,OS5. .6s5
Tons one mile.... IS, ,5S9, .957 1855, ,460 1913
Dentistry ........... 71S,0H 621, ,424
Tons per car........ 1873 II
Tons per car per
mile ............... 1890 $3.50
Receipts freight tr.
mile ............... 1921, $2.51
The improvement in operating eff
cheney. however at the latest report
and expressed in its simplest and most
intelligible form was in the conduct
ing transportation costs" in the first
six months of the 1906 fiscal year. These
absorbed in that period but 2S9 per
cent of gross receipts, compared with
37.2 per cent in 1900 In other words
the improvement in operating efficiency
means saving on the basis of $780,