New-York tribune., 1918-07-30
Southern Pacific
Earnings Highest
In Its History
Returns for 1917. Calendar
Year Amounted to
$17.65 a Share


moro In the calendar year 1917 than in
any previous twelve months since it's
formation, in 1885. Despite the press
ure Of higher costs, the railroad and
Its subsidiaries earned $1765 a share
on the capital stock outstanding, COM
pared with $12.e3 in 1916. The net in
come aggregated $49,151, 1920, against
$36,422,513 the previous year.
According to the annual report, pub
lished yesterday, the gross operating
revenues of $193,971 ,489 exceeded those
of the previous year by $30,544,066 and
are the highest in the history of the
company. Moreover, though the gain
in revenues amounted to 1859 per cent
over the 1916 figures, the increase in
railway operating expenses was only
16.99 per cent, or $17,513,086 Exclud-
ing the uncomfortable increases in
cost, such as fuel, wages and material,
the operating expenses show an ex-
penditure of only 84 cents for each
additional dollar of operating revenues.
Such a condition Of the company led
Julius Kruttschnitt, chairman of the ex-
ecutive committee, to remark in sum-
marizing affairs Of the railroad for the
stockholders: "The year 1917 closed
with the esprit de corps and iscipline Of
your working organization, the physi-
cal condition Of your property, and the
ofotv nd al 80
at higher standard than ever before
attained" Government control came,
he added, just ut this time, when the
summit of successful management had
been reached. The fact that in the
year ending December 81, 1917, the
company transported 422,Ooo,oO0 pas
sengers with only one fatality in a
train accident was cited as an example
of efficiency.
Analysis of Record Earnings
The total assets Of the company were
given as S1,685, 5,075,159, which exceed
all obligations, including the outstand-
ing capital stock, by s302,81o,421, of
for depreciation and $250,935,S23 rep
resents an invested surplus which
equals almost 90 per cent Of the out
standing capital stock.
record earnings shows that revenue
from passenger business increased
1928 per cent, which was due to the
,%>4 Is
dustrial activity caused by the entrance
of the United States into the war,
"the revenue from these sources having
more than counterbalanced the falling
off in tourist travel and the acute COM
petition of automobiles" the report
says. Revenues from mail and ex-
press expanded 1901 per cent, which
resulted from a larger volume of ex-
press business, which more than over
came a decrease in the compensation
for carrying the mail Of $580,OOO. Rev.
enue from freight traffic increased 1892
per cent, chiefly because of public and
private war business.
Equipment Standard Kept Up
Expenditures for maintenance Of
way, structures and equipment in
creased S154,366, or .37 per cent" the
ASPN'Ao ooyo, anu IoI CIduo CIldClOu
and other expenses, $17,358,719, or
1924 per cent. Notwithstanding short
age of labor and difficulty in obtaining
the delivery of rails and other mate
rial because of war requirements, the
lroadbed, structures and equipment have
been maintained at high standards Of
safety and efficiency during the year.
The annual maintenance of way inspec-
tion, made late in the year, showed
about as high a rating as in 1916. The
percentage of locomotives in good or
der was the same for both years, and
despite the heavy calls upon freight
cars to move traffic, 1918 was entered
into with only as per cent Of them in
bad order, percentage which is below
normal Ton miles of revenue freight
far exceeded any previous year, being
24.29 per cent greater than in 1916 and
1913 per cent greater than in 1915.
The continued suspension of steam
ship service through the Panama Canal
by, the diversion of ships to the trans
atlantic service and the impetus to the
country's industries which has resulted
from the war have enabled the rail
lines to obtain an extraordinary volume
of traffic, which has employed facilities
to an unusual extent and permitted
such economy OF operation as to offset
the great Increases in the cost of labor.
material and supplies" the report
states