The Washington herald., 1907-12-26
Union Pacific''s Annual State
ment to Shareholders.
SURPLUS OF FORTY MILLIONS
High Standard of Maintenance OF
Property Responsible for These
St16,OOO,COO, Which Have Been
Invested i'm Other Properties.

year ended June 80, 1907.
In the report the officials OF the road
have presented one of the most important
financial documents that has appeared
during the current year because Of the
greatly increased volume of informa-
ton given to the public. especially con-
corning matters which heretofore have
not been given in detail
The report shows a surplus earned
available for common dividends amount
ing to $Si.2io,SS7. or I7.5 per cent on the
company's Sl95. 1880 of common stock.
But the Union Pacific and Southern Pa
cifc are practically one system. To the
Union Pacific surplus there should be
added about S6.SO0OGO of surplus earned
by the Southern Pacific IN the year in
question, but not paid &c TIE parent
Union Pacific company.
This brings the surplus earnings of the
Union Pacific up to $4o.5OOOOO. or -2O7 per
cent on Union Pacific common.
High Standard OF Maintenance.
Analysis shows that this result has been
accomplished after continuing the Union
Pacific property on a higher standard Of
maintenance than is lived up 10 by any
important railroad system In the United
States
A predominant feature Of the report IS
the statement that Ia the past ten years
the Union Pacific has earned SIG. 81, ,S64 Of
profits over and above all dividend dis
bursements. The Union PRcific's profit
and loss credit balance as Of the date IN
question amounted TO S52,g77S SCI In ad-
dition to this S62.S75Oi3 Of profits have
/ been expended for improvements. better
/ ments, railroad stocks. and other pur-
| poses.
! These earned profits. exceeding S116 00O, COO
which are now held in hand or have been
/ reinvested IN stocks and properties. are
equal 20 approximately $50 a share on
| Union Pacific common.
President +. III. Hartman. who signs
/ the report. points out that the market
value OF the Great Northern and North
/ ern Pacific stocks, which were sold under
his direction. yielded Sl17 .S6S7s9. and if
they had been held 10 dale the shrinkage
from that price would be $55.527, ,536. that
the market value Of the reinvestments
shows a shrlnkage OF S23159.S S9i. so that
/ the net gain because OF reinvestments Is
/ SO. .5T.64l; and he says further that the
Great Northern and Northern Pacific
/ aNPNnS 9ANloNu I'D pr NtAL pL lllt pro-
| ceeds realized, whereas the reinvestments
/ yield 4.46 per cent. There is a gain TO the
I Union Pacific Of $l.96S, 421 per aunum.
Other L. Y. Secrets.
Union Pacific secrets are stin further
unfolded in this report. Mr.. Hartman
says that there have been sold Is3. .6O0S9
shares OF Great Northern stock. ut an
average Of $304A a share; 2i0.SO0S2 shares
OF Northern Pacific az an average Of
S2Os.76 share; 10000 shares OF Northern
Securities. az an average of $l6SS0 a
share. and 133oO Great Northern Ore at
S0.4l share.
lie says further that the total profits to
| the Urion Pacific as a result Of the origi-
nal Northern Pacific investment was S54.-
665, 70S in cash. plus Great Northern and
/ Northern Pacific stocks on hand worth ar
current market prices approximately $50
! 100000. making the net profits Of about
s55.O00.oOo
The report also states that $3.50 miles
Of the companys system are now free Of
mortgage debt and are held as a free
asset
As Of December . last the Union Pacific
held investment stocks in other railroads
| Of market value at the present time of
S2zS. .790 the investment return from
| which is Sl5.OooSe0 per annum. and in ad-
/ dition 10 this has profits on account Of
/ investment operations amounting 20 S94.-
| Cos. .7Os
| In addition TO the foregoing securities
many new securities have been added 10
| the companys treasury during the wear.
the most important Of which are $4,000 600
! 4 per cent first mortgage bonds Of the
San Pedro. Los Angeles and Salt Lake
| Railroad Company. in repayment Of ad-
vances made the latter road. and 81. 500. =
900 capital stock of the same company.
together with various other stocks and
| bonds.
Road Holds Other Securities.
Besides the so-called Investment Sc
curities'' mentioned above. at present
worth s22S. 4O3. 80. the Union Pacific holds
| other securities in other companies (not
including, however. any securities of the
| Union Pacific system or any Of its pro-
| prietary cOmpanies) Of S73,2A.O00 par
value: and approximately one-haIf of
these consists Of bonds
In other words. the Il al OF the seeuri-
ties in the Union Pacific treasury. at the
present time. excluding securities of the
Union Pacific itself and proprietary com
panies. has value to-day Of approx
mately $500 OOO.0 0OO
The report cites the fact that the fiscal
| year in question closes a decade OF the
eompanys operations since reorganiza-
| tion. and points TO the fact that its gross
! receipts have increased from $33.2sl. .l25 TO
! S7.474766. and that its surplus for dlvi-
dends has been multiplied by four. show
ing an increase from SO, 212.574 to S36 176. .92O
and states that in this period there has
been expended on the Union Pacific for
| changes in line, equipment improving
| grades, &c. S104, 427, ,9S6, and for terminal
properties and lines now in course of con-
struction $26. sol; or $780, O6lO.5S7 In all.
Viewed as a whole. this report does not
merely tax the powers of comprehension
of the ordinary individual In the story
which it tells Of S1160OO.o00 Of profits in
the past decade over and above all the
millions Of profits which have been dis
tributed to the stockholders; cf the treas
ury which holds $500 600 900 of securities
in other railroads, which are Welding the
Union PaIcifc over $l6,00O.0O0 per annum. !.
Of the property which Is paying 10 per
cent dividends on S195. At, 800 OF common
stock and earning upward OF 20 Del. cent
thereOn-the thoughtful student Of Amer
lean finance who recalls the Union Pacific
Of decade ago, and has watched rail-
road development in this country in re-
| cent years. will find in this story an array
Of facts and figures which VIII welI-niVb
stagger the Imagination.
MUST LOSE FORTUNE OR CHILDREN
problem TO solve. She must either give
UP her two children or her enormous fnr-