The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-06-06
Rock Island Showing Much Bet.
ter Than Last Year.
Cost of Conducting Transports.
ton Cut Down Considerably.
NO DIVIDEND LIKELY
Surplus to Go Into improvement
to ROadbed and Equipment.
Gossip and Matters of Interest
in Railroad Circles.

III naA1EOau OtEcl0Ss
The ten months statement OF the Chi
cago. Rock Island & Pacific railway
system furnishes a basis upon which to
estimate the income of that system for
the year 1906.
In the fiscal year 1905 the system
earned all charges, and showed sur
plus fro meperation considerably under
the 4 per cent dividends on the prefer
red stock. Only one dividend has been
paid on the preferred this year.
During the year the company sold
81, 900 odd of it's refunding bonds
and Sc. 900, 900 AZ per cent notes. Now it
retires $6,500.oo0 Burlington, Cedar Rap
ids & Northern 3 per cent bonds. In
estimating the charges for the fiscal
year 1906. as compared with 1905, note
must be taken of these issues, and also
of the fact that s24,414,OOO of the re-
funding As were issued during 1906 and
did not pay full interest for that year.
On this basis it may be estimated that
the Rock Island should show a report
for the fiscal year 1906. about as fol-
lows:
Gross 49,. ........... s51. 0ss 900 s44O51, 05s
Operating expenses -. IS, 608,OOO % ees, 1se
Net So. ........... .$14. 4as, 900 81 8S8. 80
Other income -......--- 1,s54000 1,026,ll2
Total income -. SIS. 847. 900 81. 500, 482
Charges and rentals $4,000 S,i76,372
Surplus ...............$ 1914 Abb 10
Per cent on stock, 1906, 10.1 1905, So.
This surplus may be considered as be-
longing to The Chicago, Rock Island &
Pacific railroad, and the minority stock
holders of the railway in the proportion
of fourteen to the railroad and one to
the minority stockholders, the railroad
owning fourteen-f1fteenths of the rail-
way capital stock Out of the dividends
on the railway stock owned the railroad
pays interest on the two collateral trust
issues and the surplus remains for Rock
Island company's stock.
This surplus may be calculated as
follows:
<ccruing 70 minority stock 5os'O05 $3.50
Railroad Co.'S share s. 900 s4,4l7.57o
R. r. Co.'S charges...-.- $4,000 1851, 4S6
Surplus ..........Ss. $4,000 5 766,184
Stockholders imp. loan
account - ------------- 15S5, 80
Surplus R. l. Co.'S stock. So, $4,000 81, SIS 9ls
4 per cent on preferred. 100000 1,950000
surplus 49,. ........-.s1. 27sOOO .5Oos1
This estimated surplus for 1906
amounts to about IA per cent on Rock
Island company stock of which there is
about $96, 000, 900 outstanding.
The estimate Of gross and net earn
| ings for the year is based upon the act
ual figures for the ten months, and an
600 in gross and $35e,000 in net for May
and June, both of which figures are
probably conservative.
| The other income is credited with
per cent per annum income on the SILL
4 900 900 odd raised by the sale of refund
ing bonds. This is purely an arbitrary
figure. The item of charges is increased
4 by six months interest on the bond is
! sue noted above and by the fact that
only for part of 1905 was there outstand-
4 ing more nan $200000G0 of the refund
ing bonds. Interest on the 100000 col
4 lateral notes is also reckoned in this
item.
Taking this estimate as a guide, it is
/ apparent that the Rock Island has done
very much better this year than last
/ year. This is notably true with regard
to the actual operation of the Rock IS
land system. 1t will be noticed that the
1 operating expenses and taxes are esti-
/ mated at 72.5 per cent of gross against
! almost entirely to a cutting down of
/ the expense for conducting transpOrta-
| ton. In the fiscal year 1906 this account
! took AT per cent of the gross earnings.
/ In 1906 this figure will be reduced to
/ between So per cent and 80 per cent
Apparently, equipment and roadbed
i have been maintained during the year.
1 On an increase between Of about 16
per cent gross the two maintenance
items appear to have increased 20 per
cent and rs per cent. The property has
II been allowed about 81 000,0 900 for main
tenance so far this year over and above
/ the allowance of 1905, which latter was,
if anything, over-liberal in the matter
| of equipment maintenance.
i On the whole the showing of the sys-
tenn is the best since the Rock Island
dividend on the preferred stock. The
declaration of these dividends, while the
system was practically in process of
formation is now admitted to have been
an act to meet the exigencies OF high
finance rather than the methods of
good finance.
The showing does not alter the in
vestrnent POSITION of the Rock Island
company's stock. Rock Island preferred
I as a nondividend 4. 3 and ultimately 8
per cent stock, is now earning it's divf-
dends, but with no chance of receiving
them inside the next year. Rock Island
/ common is a non6ividend issue. with
| limited voting power and a very slight
equity in current expenses. If the Rock
I Island system continues to increase its
gross and to cut down the actual cost
Of doing its business, 1t may be posi-
BILE within the next twelve months to
say that Rock Island common has a
DEFINITE future in sight. In the mean
time. it represents largely the hopes
and ambitions of the directors Of the
road
KILLED ON HIS LAST RUN.