The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-04-03

cent In 1910 and only 5.<s per cent In
1919. II We add to the property invested
the assets for additions and betterrnents
provided out Of surplus income from 1887
the system earned only s.6s per cent on
Its investment In railroad and equipment
in 1903 and as per cent. In 1913.
This company has paid q return on
the stock In every year since its incor-
poration. but In the last thirty-six years
the cash dividends have never exceeded
per cent. per annum except In 1881.
when 3 per cent WAS paid. and in 1852
and 1906. when 6h per cent was paid.
and In 1907. when per cent. was paid.
Cash dividends since ls47 have averaged
col per cent on par $50 per share.
Premiums ON New stock.
I'm considering the return paid to the
stockholders II must not he forgotten that
the shareholders paid premiums on new
stock issued amounting In all over $+b.-
000. 900 and the entire amount OF these
premiums has been used for capital pur-
poses
"Further. the market price Of our stock
to-day Is very little above par.
"Our company u owned BY over $4,000
stool holders and the average holding Il
about II3 shares. Fully ~ per cent. Of
this number II made M Of women and
two-thirds Of the stOeh holders do not hold
over e2.SOO each Of stock.
Since 1907 our large body OF stock
holders have. like everybody else. had to
face the higher cost OF living. that is.
with the decreased purchasing power OF
the dividend. We have not been able to
relieve them by any change in the rate
Of dividend. although Il IL recognized that
some OF them subscribed for the stock at
20 per cent above par and their return Is
but per cent. per annum.
The bondholders who converted their
holdings into stock at 40 per cent. OBJ
tain return Of only 4.2s per cent, while
fixed rate OF $50 per cent receive only
4 per cent per annum on their investment
"The stockholders have pursued . very
liberal policy In using the surplus Of past
years for betterments and to maintain q
nigh and safe standard Of railroad SER
vice.
Blu. what IL to be our policy In tho
future? The striking shrlnkage OF net
operating income IN recent years compels
us to review and reconsider It. We cannot
stand still: we must advance with a grow
ing country. for which there Is yet much
TO be done, or go backward.
"1f the railroads are to he crippled
there Is swept away very much Of the
economic foundation for national prog.
ress IN the life OF every citizen.
we have no alternative but TO apply
Tor relief. not that We may continue to
exist. bu; that We may secure firm
nnancial basis TO perform as we have
done 70 the beet OF our ability In the past.
our clear duty 10 the pubic and TO those
20 "hom we must look to provide new
capital In the future.
IT Is unw!se as well as unnecessary to
commit ourselves to any largo fixed pro-
gTamme OF expenditures except to say
that without assurance Of adequate earn
Ihgs they cannot proceed. and reason
able portion OF the cost Of these future
enlargements and improvements ought in
our judgment to be provided for surplus
earnings.
~ wa are allowed to earn a net in .
come that will make our dividends safe
beyond reasonable risk the company will.
| doubt ro', continue its established pol
icy OF devo,ing large portion OF Its
surplus 20 improvements and the main.
tenanoe OF safe and high standard OF
TRANSFORMATION service
"but II the security Of our dividend
IL 10 he imperiiled We must do what We
can TO protect ourselves and We shall be