The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-09-19
RAILROAD NEWS.
Review Of Santa Fe Dividend
Prospects.
Bearing of Preliminary Annual
Report on October Meeting.
SHOULD MAIZE CHANGES
Chairman Victor Morawetz on
Surplus Earnings.
Gossip and Matters of Interest
in Railroad Circles.
'HOULDMAKE CHANGES

During the past two months Atchison
has advanced twenty-five points and
new high record was established for the
stock on Tuesday. at 1101a. on fumors
that the next semiannual dividend would
be increased from per cent to g. says
the New York Evening Post And
events Of the week added strength 10
such rumors. Instead Of acting on the
dividend question first and publishing
earnings afterwards. as the Union Pa
cihc directors did last month. the
Atchison management published a pre-
lininary income account, several weeks
in advance of the regular time. showing
that 1913 per cent had been earned for the
stock last year, against SO per cent in
1905, So per Get in 1904, and 8 per cent
in 1903 If the earnings, as published,
justify the payment of 6 per cent divi-
dends, the directors acted fairly with
their partners, the shareholders, in Civ
ing them the opportunity to judge for
themselves how matters stood regarding
the question of dividends.
What tho Settlement Showed.
That is exactly what the public, as
well as the Atchison shareholders, have
been doing since the statement of earn
ings was published The increase Of
$10,200O00 in gross and 81, 000. 900 in net
income, ana SosuuO,UUO II sur Plus dppi1Cd-
bic to demands is a showing any sys-
TEN might well be proud of-the actual
surplus OF ST, .209 would enable the
company to pay 5 per cent on its $114,
173, 900 preferred stock, 6 per cent on the
$1O1, 955, 900 common and still leave 4
balance of Sc, III. 300 for the s2.50000O an
nual payment of serial debentures, and
for additions and improvements In the
criticism recently levelled against the
management of the Union Pacific, BY
in investors both in this country and
abroad, there was never any question
had been earned last year. But there
was reasonable ground for doubling
whether the interests of the investors
in Union Pacific were best served by
increasing overnight the annual distri-
button of dividends on the common stock
from S11 727 900 to s19546, 600.
In order to approach the question OF
whether the Atchison dividend should
be increased, from the investors point
of view, it is necessary to first Scrut1n-
lie each item of the income account,
for in an annual report to sharehold-
ers it is perfectly natural for the man
ayers OF a large corporation to put
its best foot first. The S78,044.347
gross earnings from operations found
in the statement can mean only one
thing: 1906 was the most profitable
year in the history of the company.
"Other income" amounting to ST.
346.401, showed a gain of $3.50, 1000;
but as to how that item is made up, or
what is meant by the "S526.569 undi-
vided surplus income Of the auxiliary
companies included in earnings, the
shareholders are left in the dark.
Instead OF Jumping the company s
investments in securities in an item
of $4AS,632.530 as railroads. Fran
chises, and other property. including
stocks and bonds,' and publishing nc
income account of the auxiliary COM
panies whatsoever, as was the case
last year. the regular 1906 annual re-
port, due in October. should make a
list of the bonds and stocks owned. as
other companies invariably do. and
also publish an income account Of the
/ operations of certain controlled COM
panies. owning in the aggregate
1.092.55 miles of railroad, the interest
/ in these controlled companies being
! treated in the accounts merely as an
/ investment in stocks and bonds" The
question of bonds and stocks owned
and the annual yield therefrom. as
well as the company's exact relation:
with controlled companies. has a de-
cided bearing on the dividend ques-
ton. and shareholders are most GER
tainly entitled to such information
If the dividend is increased above
the present rate, 4 per cent. one OF
two things must happen next year