Evening journal., 1914-12-05
SATURDAY DEC. S 1914,
RAmROAps AM DIVIDENDS.

IVY l. Lee, executive assistant the PennByl-
i vana Railroad Company delivered address
Gently at meeting Of the Media Division Of the Vet
Grams Association of Pennsylvania Railroad Employees.
His subject was why Railroad Should Pay Dvi-
dend" There are portions Of that address which, we
think, worthy Of editorial attention. Mr. Lee pre-
faced his address by quoting the following from a
statement made before the Interstate Commerce Com
mission by Mr.. Brandes when he was examining Dan
lei willard president of the Baltimore and Ohio rail-
road. That Brandes statement was as follows:
You have defended here today reduction of prac-
tically everything that has TO do with this railroad
You putting of expenditures and necessarily in
the course OF that dschargng employees And the only
thing that is maintained at its standard Is its div-
dend."
Mr. Lee said, in replying to that Brandeis statement
that to suggest the cutting or passing Of dividends
as preliminary step in railroad economy is to strike
the very roots of business processes. The pride
OF the Pennsylvania railroad is that since the company
began to operate trains nearly seventy years ago
It has always paid a cash dividend The sharehoid-
ers of this company have paid into 1t Of about
s5fo,OO0,o00; and the outstanding capital stock is
ls9.2s5,7Oo. This means that there is no water"
On its stock the company has since the beginning
paid an average dividend OF 81 per cent The policy
has been to reasonable dividend and to that
dividend What left after interest and
dividends went back the public in improved service
in facilities which did not adj to earnings.
All the money received by the railroad company
goes back to the public. Out of some 1881 100000
received last year by the Pennsylvania system from
all sources, all but s1O.41z531 was paid out for
wages materials. taxes bond interest and dividends
In other words, less than cents out of each dollar
received at the years available for extraor-
binary expenses and to protect the companys credit
against the future
During the past seventeen years the Pennsylvania
railroad system has paid out in wages 1892 1854
It has paid to its stockholders dividends less than
ore-fourth as much--S434 61S3O2-and It has paid
a dividend to the public In the form of non-ncome
improvements which cost sSee,s72.9O2. Mr. Lee add
ed that the policy of the Pennsylvania railroad from the
beginning has been TO maintain such a standard Of
credit and financial stability that in times of stress in
vestors could look to Pennsylvania stock as a sure
fortress
The purpose of railroad. he said is to give good
service at fair rates and to dividend on its cant
hal The owners Of a railroad are primarily con-
cerned with the earnings a whole. The details OF
charges and service they anxious have adjusted
to promote the convenience prosperity OF the COM
munty
II 1t we're not for the capital invested there would
be no Pennsylvania railroad Society considers It inn
portant to pay interest on savings bank deposits;
out larger part Of such deposits their interest
through Investments in railroad securities
Why then propose to penalize the man who invests
direct instead Of through the medium OF the savings
bank or the Insurance company?p Mr. Lee asked go
ciety commends the who saves money. buys a
home and thus avoids paying rent But what about
he man who saves money and buys railroad stock de-
pending upon HIS dividends with which 10 nav his
house rentY"
The iiVidend-the payment OF all capitals sort
OF Dacksaary to those who have denied themselves the
Immediate benefit of earnings in order TO assure
themselves future benefits They invest their savings
The fact that there large fortunes which do
not imply selfdenia not nvaIidate the great fac.
that the vast amount of money invested in railroad
property in this country is from the savings Of the
people.
Inc insurance companies alone have over 81 500 ooO
VVV invested in railroad securities and the savings
banks upward Of $S0000OO0O There are 30 ooo ooo in
snrance policy holders and 1OOOOOOO savings hank
oepositos In this country Here then are 10000 oor
separate accounts which have indirectly invested abou
szSOoOooO0O in railroad bonds
lhls takes no account upward of 81 600 600 600 r
american railroad securities held in Europe: IL takes
DO account OF that vast number OF our own people Uhe
nave directly invested their money in railroad secrs
nes Restrict them to a snail return on their rnone,
"nen umes are prosperous; deny them fair retur,
"nen times are bad. the railroads NJ This COUNT,
viii palsy and shrivel
10 insure fair dividend 10 the railroad invost +,
the concern and the obligations Of the ruh,,c nj,
wants good service; it is the profound duty Of tho a
ploye, Mr.. Lee commended
The Pennsylvania Railroad system paid 10 It's 9so M
employees last year slsscOOOOo in wages This was
rate Of wages IS per ceLt higher than in 1900 !
other words. had the 1900 ate Of wages been maid
1913 the total payments would have been only s125
100000. Total wage payments in 1900 we're abou
H19ooooo so that the increased to of payment n