The sun., 1919-04-13
ST. PAUL RAILWAY
DEFERS DIVIDEND
Report of President of Road
Indicates Stockholders VIII
Have Long Wait.
PREFERRED DEBT HEAVY
Company Borrowed $13,857,-
600 for Payment of 1918
Interest Charges.
PREFERRED DEBT HEAVY

r. NJ Calkins, president OF the Chs
cago, Milwaukee and st. Paul Railway.
in n letter mailed yesterday to stock-
holders expressed hope for better condi-
lions, but he set forth a financial condi-
ton which postpones for a long time re-
sumption of dividends. The letter shows.
among other things, that the ST. Paul re-
ceived from the Railroad Administration
in 1918 only $6.275.0o0. or about 22h
per cent. of its total rental; that had ~
received all OF the compensation the net
income of s6,241.510 would have been
equal to only 5l5 per cent. on tho pre-"
ferred; that the road had to borrow
S13,S57 900 in order to pay It's interest
charges: that II must finance obligations
exceeding $4,000, 900 before 1t can pay
dividends.
Theoretically s27.94s,771 total com.
pensation due from the Administration
should afford a balance for dividends
after all charges of approximately $12,-
900. 900. Preferred dividends at per
cent amount to SS,109.206, leaving a bai-
ance for back preferred dividends,
which have not been paid since Septem.
Der. 1917. all OF which is shown in the
letter by a statement of $6,241,510 net
income after an extraordinary charge OF
$55S3.96 for expenses prior to January
], 1918. charged to income deductions By
the Administration.
Practically the st. Paul borrowed in
1918 $S,500,O0O from the War Finance
Corporation. $4,50O.0O0 from New York
banks and $4,000 from the Admins.
tration. total of s13.S57.00o, with
which to pay 1918 interest. The rental
unpaid by the Administration was SAL.
671.771, but against 1t was $2,912.s<6
due the Administration on open accounts
and s1o.s72,711 charged against the COM
pany on account Of Administration eI-
penditures for additions and better
ments.
In other words, the amount due on
s2l,671,771 rental was exceeded by $27,.
642,557 aggregate obligations. which
does not include 100000 borrowed
from the War Finance Corporation to
retire Puget Sound and willapa Harbor
Railway trust certificates which matured
on June 1, 1918. Remaining to be cared
for is the cost of 100 Mikado engines
and 5000 box cars allocated to the COM
pany by the Administration. There will
have to be n radical change in financial
conditions before those obligations can
be financed, the letter infers.
The st. Paul made application for
S2.000.000 extra compensation in addi.
ton to the s27.506.771 certified by tho
Interstate Commerce Commission as the
average net operating income for three
years ended on June 80, 1917. 1t re-
ceived $4,000 extra compensation. ex-
planned in the letter az follows: THE
general policy adopted by the Director
General has been to deny all claims for
extra compensation. Due to recent ex-
penditures for installation of electrical
operation of 40 miles of the company's
railway between Harlowton, Mont, and
Avery. Idaho, in February, he allowed
the tiOn
$4,000. making total compensation
s27.946.711.
"Only small part" the letter cons
tinues, "of that amount, $6.2 900, was
paid by the Administration to the COM
pany in 1918. The company was. there-
fore. under the necessity of borrowing
to meet interest and other obligations az
follows: loans from War Finance Corr
poration to pay interest $500. ooot
loans from New York banks, s4.50o.00ob
loans from the Administration. SS57,s
| 600; total of foregoing to pay interest
S13.S57.000.
Besides the loans there is due the
administration, for open accounts
s2,912.s46, which will be deducted from
the compensation for 1915
I'm addition the company was under
necessity of obtaining a loan from tho
War Finance Corporation to retire the
trust certificates of the Puget Sound
and Willapa Harbor Railway Company,
one Of its six subsidiary railways,
amounting TO 100000. which matured
June /, 1918, the payment of which the
company had guaranteed. The admin-
istration has n charge against the com@
pany OF s10,s72,711.70, on account Of
expenditures made by 1t for additions
and betterments to the company's prop.
erty during 1918. The administration
allocated to the company 100 heavy
type Mikado engines and 5000 box care
| Il 900 OF which are to be built In tha
| company's shop at Milwaukee), the oosk
! OF which the company is obliged to meet,
These last three charges will be financed
| as soon as conditions will permit
while your board Is hopeful OF bse4
ter conditions and more favorable 70.
suits for the year 1919, the compiled:
| tons and uncertainties Of the railroad
situation in general render it impossible
| to make definite forecast at this Tina
Meanwhile, the property of the conn
pany is being we'll maintained. and with
the return of normal conditions II II
confidently expected that more favor<