The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-08-07
REMARKABLE REDUCTION.
Santa Fe Shows Larger Net Than
Gross Increase in June Earnings.

Gross Increase in June Earnings.
The most remarkable feature of the
June statement of the Santa Fe, which
completes the earnings account for the
fiscal year. is the great reduction in
expenses IN the face of a very large in
crease in the amount of business han
died. While gross increased $3.50, 600,
net increased no less than 1911, 600. In
part, this showing is due to the fact
that the comparison is with a month
in which conducting transportation
was expensive on account of the big
expenses encountered during the rainy
season the year previous. In June,
1905, higher expenses absorbed $780,
600 out of an increase in gross of
$763,000.
The gross earnings for the year did
not run as high as had been expected
by the most sanguine, but exceeded by
a trifie the estimate of $4,000, coo
made by officials Of the road some
weeks go. This is a gain of Sc, $50, 600
over the business of the previous year
and it is accompanied by a reduction
of the operating expense ratio from
66.5 to 62.1 per cent The directors
and officers of the road have forssome
time been assured that the earnings on
the common stock would be better
than II per cent
The Santa Fe left the receivers
hands in 1896. No dividends were paid
until early in 1899 when / Il per cent
was paid on the preferred. Two years
later the preferred had been put upon
a per cent basis, where it has since
remained; the common had been put
upon a 4 per cent basis where it has
remained and the Santa Fe-then
having just passed through crop
failure, probably having more mileag
in unsettled regions than any other
railroad in the country, Its equipment
in poor shape and generally in great
~
bursting dividends at the rate of S10.-
/ 10000 per annum and was at that
/ time the largest dividend disburser of
any railroad in America and for that
matter in the world.
The next year the Santa Fe sold
$4,000, 900 per cent serial bonds for
new equipment. improvements. etc.
This policy raised a. storm of protest
and was said to promise nothing but
quick bankruptcy. Since then its
earning power has steadily grown and
its credit has steadily improved It's
serial bonds were sold in 1902 at about
/ 90; its recent issue of $4,000, 900 con-
vertibles were put out at par Now
! it is believed in some quarters that its
common will go upon 5 per cent ba-
sis this fall OF its ability to take this
| step there has been no question.
It is probably safe to say that the
Santa Fe was in worse condition ten
years ago than the Southern Pacific;
but at that time through reorganiza-
! ton its charges were reduced nearly
a half. Since then the two companies
have followed two policies. the one
the complete antithesis of the other.
The Santa Fe has had expended upon
1t for Improvements alone about
500. 10000 in the past ten years; the
Southern Pacific has had expended for
improvements alone about 100000
/ 600 in the past ten years. The Santa
Fe's money came from bond sales. the
ings. The Santa Fe has been paying
SO, 900 900 per annum in dividends
for five years: the Southern Pacific
has not paid a cent. except for a few
millions on its preferred stock.