The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-09-09

Surplus to credit OF proht and loss
June 10. 1905, ........ SO. oeS. az %
hechangesi in the operation account are thus
summarized:
average operated mileage increased from o.4tsn
Gross earnings increased from tSo.e .zSoIo TO
Gross earnings per mile increased from t4,1S2ot
to 1888 40. or 70. 81 per cent.
rentals, taxes and other charxesl Increased from
G1Si,OIl 20 10 $50, III 22 10. or 2oeSs per cent.
The report has been eagerly awaited in
che financial district, as Atchison has been
repeatedly tipped for an increase in diyl-
dends to at least 9 per cent. After the
general statement heard was that Q per
cent. on Aschison Is sure s..
On the matter Of the company's dividend
policy the report says:
For the five years last past Including one
year Of extraordinary floods. which affected
ret earnings to the extent Of at least ; per
cent. on the common stock the net income
applicable TO dividends on the common stock
has averaged about o per cent.
However, in the opinion of the board. the
whole amount Of the net earnings OF the COM
pany shown by the accounts is not properly
available for the payment OF dividends on
the company's stock. Prudent management
requires that part Of the surplus income during
years OF great prosperity should be reserved
for the purpose of improving the company's
property and increasing the stability OF the
investment Of its shareholders. Further
more. every large railroad system in the
United States is obliged to expend annually
considerable sums for improvements and ad-
Gitions that are not chargeaole to ordinary
operation and maintenance expenses, but,
nevertheless, ought not to be charged to
capital account. OF this class are expendi-
lures for elevating tracks in cities. for addi-
tional safety appliances, for better stations
and cars and generally for furnishing better
service to the public without increasing
Charges. Although expenditures Of this class
are not ordinary maintenance expenditures,
yet they should be charged to income and not
10 capital account, except TO the extent that
they clearly add to the net income Of the COM
Uauy by increasing earnings or by reducing
operating expenses.
While IL is Of little practical consequence
whether the undivided surplus income be
allowed 10 stand upon the books as surplus
or be written of by direct charges TO current
income. or by charges to profit and loss ac-
count, the directors have deemed II advisable
20 write OF part Of the surplus as In previous
years, so that the book surplus representing
income already expended on. the property
may not be unduly increased. Accordln ely,
$500. 900 was charged TO the income Of the
fiscal year on account OF betterments, i'm
proyements, &c, written on. and certain
additional charges were made in the profit
and loss account.
B~etterments and improvements on existing
mileage and discount on bonds sold from the
organization OF the ompany to June 30. 1904,
amounted in the aggregate to $40, 900. SAT. %.
During the same period the undivided surplus
net income. after deducting all charges and
dividends, amounted in the aggregate to
itO,l3l 1927. OF this sum $50. La. SOS.2e was
charged of in various ways. leaving a balance
Of $40. 9s5, 49,. 90 standing to credit Of profit
and loss as surplus on June 30, 1908.