New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-03-07
HIGH WAGES VEX ROAD
Advance Offsets Increased Rev
enueS of the Pennsylvania.
ISSUE SlXTY-F0URTH REPORT
Total Cost of the New York and
Long Island City Terminal to
Date, S112,965,415.

Date, S112, $50, 415.
The sixty-fourth annual report OF the
PENNSYLVANIA Railroad Company. issued
Yesterday shows gross operating revenues
from rail lines directly operated amounting
10 $3.50 As. ees. an increase OF Slo,S63,t65 over
the figures for ROO: operating expenses OF
slAsie.ses an increase Of Sc, l9S. and net
operating revenue Of S45,st461O. Deducting
the defoit Of 81. SOa.SSs from outside opera
tons and adding sSS747S6 paid in taxes. an
increase in tho latter item OF s.60I'O', the
operating income for the year was Sd,Soo, .
54e a decrease OF Ss.6Sl.2S6 Rentals were
pals amounting to s9.177,&0 leaving the net
operating income at SS57S2.6S6. Other in
ccme aggregated Sl7.i5ssi6 the gross income
being SSSs4.502. Fixed charges including
interest and rentals and appropriations 10
sinking funds, were s5.4e6Ols. and the net
;ncome after their deduction amounted TO
Ss7.5s5.iSi
Deductions from net income included an
appropriation Of SnS,522 TO the trust OF
October 1875; SS.GSe5S for payment of part
OF the principal Of equipment trusts S.5oi'-
b77 appropriated for extraordinary expendi-
lures. s9i4l0SS0 for dividends and $4,000
appropriated as reserve for additions and
betterments. this fund having been de-
scribed in former annual reports as the
extraordinary expenditure fund These de-
auctions amounted in all TO $3.50. $50 leav-
ins a balance of s.. i32,sf7 TO the credit of
profit and loss
Addng this amount TO the profit and loss
total as Of December 81. 1902 and adding
also the stock dividends OF the Pennsyl-
Nania company and sundry other credits,
the balance Of income for the year 1910 was
s524S9.f1S From this were deducted 81 40, =
c1c, applied toward the construction Of the
New York tunnel extension and H2S95 0l6
applied in the reduction Of cost OF securi-
lies and adjustment Of other accounts the
final amount 10 the credit of profit and loss
at the close OF last year being S27 Oh, i62, an
increase of Sl.Sei174.
Referring TO the movement for permission
10 advance freight rates, the report says;
The revenues for the year. with the ex-
CeptiOn of the last three months, show 4
far increase, compared with 1862 but this
increase has been offset by the large in
creaSes in operating expenses. due prin-
cipaly TO advances in wages OF employees
The burden OF this and other Increased
OUTLAWS and charges such as taxes, led the
company TO endeaVor TO make moderate re-
visions in certain class and commodity
rates. affecting only a comparatively small
percentage of the total traffic carried and
which, II granted, would have netted the
lines east Of PittSburg an increased annual
revenue estimated at 100000 which IS
about 100000 less than the estimated an
nual increase in employees wages. These
proposed rate increases met with pro-
nounced opposition. and during the prep
aration Of this report tho interstate Com
JnerCe Commission has declined To author
ize the rate schedules that were fled 10
secure the advances.
The report says Of the accounting sys-
fem ordered by the Interstate Commerce
Commission:
The now accounting CasSifCstions pro-
mulgated ny the Interstate Commerce Com
mission require all expenditures above bar
maintenance to be included in the cost of
road and equipment. and there seems To he
a growing tendency among American rail-
roads 10 FORGET the lessons learned through
a long ast Of receiyerships and reorsaniza-
lions. and provide out Of capital for out
laws which should be met through income.
IT rates could always be uniformly main
tanned, u the cost OF labor, material ana
taXe' were always stable II business pros
perity we're continuous, if II were not nee
essary for railroad 10 make any improve
ments except such as would substantially
increase its earning power. then under
that All construction expenditures should
be capitalized and the funds provided
therefor through the sale Of stock or bonds.
Your MANAGEMENT has always aimed 10
conduct its operations 50 as 10 give an
efficient service 70 the public. adequa tslv
maintain the property. provide for depre-
citation and obSoleSCence. pay regular divi-
bends 10 It's stockholders and earn sur
plus income for those necessary additions
and hettsrnenfs which I'm themselves add
but little II any 70 earning power. The pur-
suit ~ this policy has esta blished and main
Jsined the high credit OF your company and
made possible tho physical development
through which, n is able 10 render the safe
and efficient service required by us patrons
and ~ Is the Judgment Of your mana cement
that any enforced departure from this pol
.cy II u0vi7e
~ tho $500. 600 1on authorized capital
stock the report notes. less than SIS. 600 To-
600 is unissued Of which S66 o0O oo0 is re
served for conversion needs. leaving about
SO mao 000 available for maturing ohlga-
r'ons and for additions. betterments and i'm
provements. The prospective needs Of the
company will require about $40 900 oOo. and
- prevailing conditions favor H. as it is
believed by the management that they will.
this amount will nc raised by an issue Of
oapital stock \ 10 per cent allotment at
Tar would provide in round numbers ST.
GOO 00o Of which about $4,000 coo could
le provided from the unissued authorized
stock and the remaining $40 100000 out Of
Tho proposed increase Of 500. 900 600 in the
Total capital stock
Details Of the various Improvements car
sied on during the year on the system are
gwen. including mention OF the completion
and opening for operation Of the New York
tunnel extension. concerning which the re-
PORT says:
n is evident that no extraordinary ter
,n'nal development OF this character can Of
itself be profitable II solely dependent on
the passenger rates which can be charged
FOR the snort mileage operated, and il nat
rraIlv follows that YOUR con pany as owner
viii pay any deficit arising rom its opera
ton. because II was constructed primarily
FOR the use and benefit Of the entire Penn
sylvania Railroad system as an entrance
3nto and through New York CITY and Long
Island.
The total cost of this extension 10 De
cember 81. 1910. including real estate not
permanently required FOR lis use aud con-
eervativcly estimated 10 be worth between
< 900 000 and $500 600 and not yet disposed
or Is SIP 90 il5 o. Of which Atf010O has
feen charged against net income ana proht
and loss. and. az explained ~ previous re-
ports. 100000 has been borne by the
Pennsylvsnia company and charged against
ST. profit and loss account
The securities held by tire company as of
december 81 last amounted in value to
$3.50 10 sOi. the income from them having
leen S4.ee.s76 The total OF this item a
wear previously was t27299l .i2j. The com
many has during the year increased its
holdings OF Norfolk & Western common
stock from 5000 60 10 S3l.G50Sl0, out Of "a
total outstanding OF S6s,fi5.,o0. ana also
owns g. $4,000 Of the adjustment preferred
stock. against $4,000 a year ago. Owing
&, mart 10 the increase in wages the eX-
,enditures for pensions are rising having
u. .s.e<. oil hold nFg