Evening star., 1914-10-10
RAILROAD EARNINGS
SHOULD SHOW GAINS
Monthly Comparisons Will Now Be
Dividend and Pays in Scrip.
Of Last Year.
Southern Railway Cuts Preferred
Dividend and Pays In Script.
Gossip Of Street.
BY I. A. FLEMING.

While it is a fact that preliminary
returns for September from the vari-
GUS railroad companies indicate de-
creasing earnings, there are indications
that future reports may show more en-
couraging conditions. even should the
interstate commerce commission with
hold still longer the advance in freight
rates to which the railroads are en-
titled.
Throughout the summer months the
comparisons have been with corre-
spending months in 1913, when record
traffic tonnage was reported as the rule
rather than the exception. With the
November figures the comparisons will
be with less active months, for the fall
and winter of 1913 were lean in rail-
road earnings.
Another favorable influence is the re-
vival Of our export trade. While 1t has
not reached the proportions that might
reasonably have been expected in nor
NAL times. the volume is far ahead Of
the prostration of last August, and the
comparison with August, 1913. is not
SO adverse as might be expected.
Net earnings are a little better than
they were in 1913 Under the dictates
of necessity expenses have been re-
duced by railroad companies. but this
economy cannot be continued for any
great length Of time. 1t requires con-
slant expenditure to maintain physical
condition up to the average.
One important factor in the main
tenance Of dividends is the probability
that regular distribution is in itself
suhcfent to encourage foreign holders
to retain their securities and not liQui-
date on the opportunity. Railroads
are encouraged to maintain dividends
to maintain foreign confidence.
IT reductions in annual distribution
are forced. they will be less injurious
in their effect IL there shall be a gross
gain in earnings.
With the prospect of more favorable
comparisons and the hope amounting
almost to assurance that the interstate
commerce commission will reverse it,
self and put real value under railroads,
the general impression regarding the
great bulk of railroad securities Is
more encouraging.
Prices quoted by brokers in unlisted
securities. on most Of the high-grade
rails are not far from July 80 averages.
Southern Railway Cuts Dividend.
The action of the directors of the
Southern Railway Company in post
poning action on the preferred dividend
a month ago has been followed by the
declaration yesterday of a scrip divi-
dend of 2 per cent instead Of the full
dividend of 2k per cent for the period.
making the annual distribution AZ Der
cent instead of per cent.
Accompanying the notice was the fol-
lowing statement from the company:
Although the full dividend of 2H per
cent for the period had been earned,
the board deems that, in view of the
falling OF of revenue and the conse-
quent necessity for retrenchment of ex-
penses. 1t was fair that the stockhold-
ers should share with the employees and
omcers OF the company a sacrifice of
their current income"
Scrip issued in lieu Of dividend is
payable hve years hence and itself
bears interest at the rate Of 4 per cent.
Government 2s.
Bankers are the only buyers Of gov.
eminent 2s at this time. Transactions
are being made on the basis of s5k
Bankers desire the bonds as collateral
for government deposits. with the fur.
ther assurance that. under the provi-
sions Of the federal reserve law. they
are retirable at par within the next
twenty years.
Financial Notes.
The value of the grain crops of 1914
is placed at s550,000,0 in excess of
the value Of the harvests of 1913.
Grand Trunk system (for August)
gross earnings decreased $4,000; net
decreased $4,000.
Georgia Southern and Florida for the
fourth week of September lost SS.264.-
o9g IN gross earnings.
New Haven gross earnings for Au-
gust, IS. .909. as compared with S..
1926 in August, 1918. Net. after
taxes. decreased $4,000.
Cashiers John Riordtn of the Rank
OF Commerce and Savings, e. S, Gateiy
OF the Lincoln National and E, s. wolf
of the District National will represent
their institutions at the convention OF
the American Bankers Association at
Richmond October 1916. Most of the
other banks will send their presidents
to the convention