New-York tribune., 1920-03-03
Pennsylvania r. r..
Earned @.29 ON
Its Stock in 1919
President Rea, in Report to
: Stockholders, Says Road.
bed and Equipment Are
Below Usual Standard

The Pennsylvania Railroad reported
for 1919 gross income of $s2,3eo 1859.
compared with sSs,594.4s7 the preced-
ing year. After deducting interest,
rentals, war taxes, ETC., there was a
surplus Of $42,86S,0 ,093, equivalent TO
S4.2s share, on the $4s9. .cs5, 200 capt.
tai stock (par value s5o) outstanding,
contrasted with $4.41 share earned
on $499, 9,178,400 stock in 1918.
In the annual report issued yester-
day 1t was disclosed that the gross in
come for last year was made up Of $67,-
l2s,46S government compensation and
S25 .233,906 other corporate income,
these items showing respective in
creases Of $1,1SS, 1923 and $2,632,15s. In
terest Charges, rentals and war taxes,
however, increased s4,e68,6 ,6S2, with the
result that there was q loss in net in
come of S1,202, 800.
The increase In. the company's Fed
eral compensation was due to the acuui-
sition during 1919 of the Cumberland
Valley Railroad Company, the Balti-
more T. Sparrow's Point Railroad and
the Susquehanna, Bloomsbury & Ber-
wick Railroad, and to the lease Of the
Union Railroad Of Baltimore. A de-
crease Of $1,212,S24 in the dividend in
come was due to the sale Of Southern
Pacific stock owned by the company, and
similar holdings owned by the North
ern Central and Philadelphia, Baltimo re
\ Washington, which are leased to the
Pennsylvania. Income from dividend.
was further cut by the acquisition Of
the Cumberland Valley & Sparrow's
Point Railroad and the lease on a fixed
rental basis of the Union Railroad of
Baltimore.
An increase OF $S29,9s0 In income
from funded securities was attributed
to. the interest on larger amounts of
government war bonds subscribed to
by the company. An increase Of ST.
ties arose from interest on unpaid
compensation and unpaid open accounts
due by the railroad administration and
from funds derived from the sale Of
general mortgage bands.
Net expenditures for new equipment
and betterments to existing equipment,
after deducting salvage and other re-
tirement credits, the report stated,
amounted to S7,9So,5o8. The equip
ment completed during the year con-
sisted of eighty-one locomotives, 3,115
ASiShe SnAS, vac DakBAEc express car
and one test weight car. The net in
crease in road and equipment on lines
owned and certain roads operated under
long term leases amounted to $21,114,-
$50. In addition, it was stated that
the company has agreed to accept from
the government 1850 freight cars and
1865 locomotives, at an estimated cost
Of $4,000, 900. This equipment has been
financed through the issuance of equip
ment trust certificates to the railroad
administration, payable in fifteen
years.
After discussing the provisions Of
the Cummins-Esch law. and the neces-
sity for increased freight rates, Samuel
Rea, president, said regarding the con-
dltlon of the Pennsylvania system upon
its return to private management:
LAS the result of war conditions and
the crisis through which the nation
has passed, your property is being re-
turned to it's own management, with its
roadbed and equipment below it's usual
standard, and the earning capacity Of
the system materially reduced"