Las Vegas optic., 1914-07-28

ent time aDsorDS $y,lbf, ,bzl OF tne up
Grating revenues of the company. This
amount is considerably more than
double the total amount paid each
year by the Santa Fe in wages to It's
firemen and engineers; or, in other
words, had the company not been bur
dened with excessive stock issues it
could increase theswages of its fire
men and engineers 250 per cent and
be in the same financial condition as
it is today. From 1889 to 1918, the
total dividend disbursements by this
railroad upon excessive stock issues
were in round numbers $103,000,000.
This enormous amount of operating
revenue should have been available
for increased wage payments to en-
1t is evident that the profits of the
company arising from the increased
productive efficiency of its employees
and from other causes have been alb
sorbed by excessive capital issues.
Were it not for the financial manage
ment which has brought about, this
and similar situations, engineers and
firemen. who are now requesting a
more equitable participation in the
output of their labor on western rail-
roads, would not be confronted with
the unwarranted and indefensible
claim that operating revenues have
been eaten up by an advance in labor
costs.
The foregoing statements are based
upon data relative to the Santa Fe
now on file at the United States in
terstate commerce commission. Brief
ly stated, the most significant facts
relative to the financial management
Of the company since its reorganiza-
ton in 1895 have been as follows:
l. Since the Atchison, Topeka &
santa Fe Railway company took over
the property of the Atchison, Topeka
& Santa Fe Railway company on jan
uary 1, 1896, it has issued Cup to
191D stocks and bonds to the par
value of $654,7S4,362.71
2. For reorganization purposes, Sc
curities were issued with a market va
lue of $954,541,7S0. These securities
were exchanged for securities with a
market value, based on contempora-
neous market quotations, of only
s140,9 ,4O4.S2, or 1914 per cent of
the par value of the securities issued
at the time of the reorganization,
therefore, exceeded the market value
of the securities obtained by the enor
nous sum of $213,63S,376 In other
words. approximately 60 per cent OF
the securities issued for reorganiza
ton purposes was water"
8. Preferred stock and genera
mortgage bonds of the par value oi
$17553,600 were issued in exchange
for the securities of the western divi
sion of the Atlantic & Pacific Rail
road company. The cash value o.
this property was only 1854 800 OF
26.12 percent of the Atchison securi
ties issued for 1t. The acquisition o.
this property, therefore, represented
the issuance OF practically $t3 900 O0t
of fictitious Atchison capitalization
/ If the transaction be considered from
4 another angle it is seen that the Sc
curities issued for the western divi
sion of the, Atlantic & Pacific rail
road had market value, based OF
contemporaneous quotations, of 50,
1922, or were worth in the opel
4 market approximately twice as mucl
+ as the cash value of the property TO
4 which they were exchanged.
i a. In 1898, $10,1O3,OO0 genera
mortgage 4 per cent gold bonds c
q 1856 were isued in exchange 70
II guarantee fund notes of par an
] market value of $8,605, ,000 Thes
D bonds. were, therefore, issued for S,
. curities equivalent to cash to S517
per cent of their par value Conten
poraneOusly with such issues, thes
bonds were sold in the open market 6
4 from 1O1.O6 to 102.O6 per cent of the
par value, and were sold to bankers
from 9S.3S2 to 9S.7576 per cent
& their par value. Assuming, conseI
u vatively, that they were worth pa
3 in the market, the excess issue wa
81 81, ,49S,000. Interest on this amour
is $59,92O annually, OF total of 81
e. 25O,320 from the operating revenue
b of the community will have to be diss
pated during the life of these bond
s 5. Altogether, since the organic
n ton of the present company, it a
pears that securities of a total De
N value of $446.631 ,4SO, have been
Il sued for considerations other tha
la l.