The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1911-08-19
IND. DIVISION OF
c. { 0. IS BIG ASSET
SO Far Has Yielded No Com
mensurate Return-Oth-
er G. & O. News.

Chesapeake and Ohio's comparative
ly poor showing for the year ending
June 80 has given rise to some appre-
hension regarding the continuance OF
the present annual rate of per cent
on the stock.
While the company did the largest
gross business in its history for the
year recently closed, yet the amount
available for dividends was equal to
5.14 per cent on the $62,79S,300 stock
compared with 1920 per
cent for the year 1910. The margin
over dividend requirements for 1911
was exceedingly slim.
Unlike so many railroads through
out the country, Chesapeake did not
see fit or was unable to bring down
it's running costs and the excess over
the year 1910 was s2,S56,916. or about
Is per cent. At the end of 10 months
officials of the company rather ex-
pected that the concluding two months
of the fiscal year would see reduc-
ton in expenses over the same
months of 1910, but such was not the
case.
Expense Was Larger.
Every item of expense was larger
than the year previous and of the to-
tai increase, transportation costs con-
tributed about 81 per cent. Both
maintenance of way and maintenance
of equipment increased materially.
In 1910, when the road made such a
gratifying exhibit, maintenance was
apparently not skimped, for all the
items showed substantial increases ov-
er 1909. But operating ratio in 1911
was 66.7 per cent, compared with COS
per cent in 1910.
Fixed charges and taxes, less other
income, of S7,561,511 for the year,
compared with $6,009,9S4 for 1910, an
increase of over $1.500,000. 1t was
rather unfortunate that the increase
in fixed charges should have come in
a year of comparatively unfavorable
operating and general conditions. The
$31 100000 four-and-one-half per cent
convertible bonds issued a year ago
last spring increased interest charg-
es in the last fiscal year about $1,177,-
900. OF the $29,0OO,OOO proceeds, ST.
100000 went for the acquisition OF
Hooking Valley stock, $1.500,00O was
used for purchase of Kanawha and
Michigan stock, $10,000,000 was des-
ignated for improvements and $780,.
900 for the purchase of the old Chi
cago. Cincinnati and Louisville. This
100000 was the set price for
which the road was obtained at auc-
ton, but the total cost of the Chesa'
peake and Ohio is probably in the
,neighborhood of $S,0O0,000.
An Unfortunate Purchase.
In the acquisition of the Hooking
Valley and the Kanawha and Michi-
gan, the Chesapeake and Ohio has
been unfortunate. Litigation over the
control Of these properties started as
soon as the purchases were consum-
mated, and is still pending. Chesa-
peake and Ohio has been receiving
dividends on the Hooking Valley and
recently Kanawha and Michigan paid
an initial dividend of per cent, which
meant $4,000 to the Chesapeake
So that the increases in the bonded
debt of the Chesapeake for the con.
troll of these roads, while it has to
some degree tied up capital, has not
been altogether unproductive. If the
courts unite the controlling company's
hands these two properties could east
ly be made worth considerably more
Value Of Indiana Lire.
So far the acquisition of the line
from Cincinnati to Chicago has yield
ed no commensurate return to the
owner. But a Director of the Chesa.
peake recently remarked that the best
part of the systems future was in this
stretch of track. About $1,000, 900 has
been spent on improvements on this
line in the past year and officials ex.
pect that the value of the road as a
traffic carrier will begin to be shown
by fall, when improvement work will
be near enough completed to let
freight and passenger trains move un.
hampered.
The year just ended was the most
unfavorable from the standpoint OF
money saved from shareholders since
1908 when only 80 per cent was earn.
ed on the stock.