The Caucasian. (Clinton, N.C.) 188?-1913, 1907-12-05

Why the Road 10 Not In Better Finsn-
eisi cenaition--psia Gig oisissncs
Iassssa Of Double Tssekisg this sys
tenn.
a. the Southern Railway is now
prominent ia the public eye, on &C
count Of the rate litigation. and o.
much has been said pro and con
about the fnancial condition Of the
road. We give below some statistics
from the Wall Street Journal as 20
the condition and financial standing
Of the road. The Journal does not
give Its authority for its statements
bat we publish them for what they
are worth. The article from the
journal 10 a. follows:
"rhe fixed charges and rentals Of
the Southern Railway are now ruu-
ming about $l2, 000,000 Q year, or
90, 900, 900 each quarter. Its net
earnings for the September quarter
were were s2,9is,365. Its net other
income, on the basis OF last year,
spproximates $500, 900 per quarter.
On June 80, last, the Southern
Railway closed the 18th fiscal year
Of Its existence. A consolidated in-
come sccount for this period shows
that In twelve years the company
disbursed In preferred stocks divi-
dends $22,95S. SO4, and that 1t ap-
propriated out Of the current income
for additions and i'm improvements not
to be capitalized the very small ag-
gregste of SO, 501,516
Its dividend policy more than
anything else has kept the Southern
Railway In q condition Of genteel
poverty.
The Southern Railways dividend
policy has been defended on the
ground that dividends we've neces.
sary TO hold up the company's credit
SO In twelve years it has disbursed
yearly $23, 200, 600 In preferred stock
dividends TO keep its credit good,
and Its credit Is wretched. Its pei
cent notes are selling at price tC
yield the buyer about II per cent
which would not be the case excep,
the average buyer had his doubts a,
to the likelihood of their berg paid
Its preferred stock is selling around
80, or on level with a good many
non dividend paying securities. Thai
10 how dividends have helped the
company's credit
When the Southern Railway Com
pany was organized in 1894 it wa
the sense Of Its creators that tn
road should be double tracked a.
speedily as possible from Alexan
dris, near Washington, d. @ to At
lanta. The company received from
the reorganization committee fiv'
million dollars cash and reserve o
1920, 100000 I've per cent consolida
ted mortgage bonds to be issued a
needed for additions, improvements
etc. Instead of double tracking tn
road, the management entered upol
a policy of physical expansion, tax
ling on new mileage at very rapit
pace, quite ignoring the fact tina
every additional mile increased tn
strain upon the main stem of tn
Southern Railway proper, betwee
the Middle South and North Allan
tic Sesbosrd. The reserve of $40
100000 consolidated mortgage bond
available for additions and improve
ments has just been exhausted. Tn
'ast of them was listed a few day
ago. There is a new development
and refunding mortgage per Ger
bond for which there is no market
No funds can be raised at preser
on any reasonable terms. It seem
that the company has reached tn
present limit of its borrowing ca
pacity.
On June 80, last, the Souther
Railway had 2O6 miles of doubl
track; when the work now unde
way is completed it will hav
yearly 800.
, The $22, 958, 9O4 disbursed In div
ienns on the preferred stock woul
have built perhaps 1000 miles {
iouble track. If the Southern Raj
way had 1000 miles of double trac
it would be, undoubtedly, one {
p the best railroad properties in til
country.