New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-08-01
Great Northern's
Strong Position
Shown i'm Report
Settlement by Government
Would Aid Earnings Out
look; Financial Structure
Unhurt by U. S. Control

The Great Northern, if the Harding
railroad plans go through, will receive
100000 from the United States
Railroad Administration, and will issue
its securities to the government for ap-
proximately $74,00O,000. This is as
Stunning that there has been no i'm
portant change in the company's finan-
cial condition since December 81, 1920.
The company's annual report for the
caledar year 1920 is made public to-
day. The balance sheet as Of Deem
Der 81, 1920, shows $7,S41 900 cash in
cluded in total of $57O00,00O current
assets. These current assets also in
clude approximately $20,000000 rents
receivable from the government. The
company has $21 100000 loans and bills
payable included in current liabilities
OF $40 ,789,000 .
payment of approximately $780,
100000 in cash to the Great Northern
by the government would enable it to
strengthen its working capital position,
end to make such additions and better
ments as the management saw fit. The
company has no large issue of Sc
curities becoming due before 1888, and
the government cash payment would
permit Of paying off the two Minnea-
polls Union Railway bond issues, aggre-
eating $2,S00,000, when they become
due in 1922
With the financial needs apparently
so well taken Of, the immediate future
of the company will depend on it's
earning powen In the past the Great
Northern has earned safely and with
q good margin 7 per cent on it's $249,-
477,000 stock. The relation of out
standing stock to bonds is better than
of cf no -
railroad companies. The capitaliza-
ton is almost equally divided between
stock and debt The issue of 74,000,-
600 additional bonds is not, therefore,
as serious piling up of fixed charges
as it would be on a road where the
funded debt was much larger part
of the total capitalization. Thus the
company continues with sound finan-
ciai structure after it's experience of
government operation, but with a much
changed earning power. This change,
of course, may be only temporary.
In the past the strength of the Great
Northern has rested in large part on
the extraordinarily low ratio Of oper-
ating expenses to operating revenues.
In 1920, however, the ratio of operating
expenses to total revenues from trans
portation was 96, and the ratio Of ex-
penses and taxes to operating revenues
was 101. Since the end of the calenda-
year the company has been showing a
large improvement in operating ey-
penses.
The following table shows the prin-
cipal figures for operation of the Great
Northern in the calendar year 1920, as
compared with 1912
Freight revenues sS9T6OS45 sfT35l Al .
Passenger revenues 20.551,025 l9633.S59
Total oper. revenues t22 ol6.776 100. 5s2. lac
Maintenance OF way
ana structures ~. ss.112s.sss ls.l5s.ss5
Transportn expenses 55,712.Sss A4.4S2,SGT
Total oper expenses 1l$,s9s.G59 s7.i4s.40S
The corporation income account
showed a gross corporate income Of
SIT 100000, and after the payment of
interest, rentals, etc, there was S19,-
$4,000 available fer dividends. The
regular per cent dividessis called for
~ 10000, leaving sur9luNof 81, Sl5.-
0oo.
The total tons Of revenue freight car