New-York tribune., 1921-06-30
Southern Pacific
Earnings Higher
Despite Cost Gain
Revenue Increases Nearly
1870 Against Advances of
500 in Maintenance and
rs % i'm Transportation

Il
The Southern Pacific Company actu-
ally had s32,o7o,ooo available for divi-
dends in the calendar, year 1920, which
Is equivalent to S10.57 a share on it's
stock, compared with $31 54e, 900 net in
1919, the equivalent of S10.45 a share
on the stock. This represents the
rental received by the corporation for
It's road used by the government for
the first two months of 1920, and the
guarantee of net income for the next
six months and the actual income from
operation of the property for the last
four months of the year.
For the year the actual operation of
the property yielded 1882, ,270, 900 reve-
nue, an increase of ITS per cent over
1919. Maintenance charges totaled
$los,014,ooO, an increase of 1929 per
cent, and transportation expenses were
Silf ,238, 900, an increase of 25 per cent
The net railway operating income after
the payment of taxes and rentals was
S28,312,000, or $1S,365, 900 less than the
1919 net.
The company had, roughly, S42. .50O.-
ooo more revenue and 1S,400, 900 less
net, difference of nearly sci ,000, ,O0c,
which represents the increase in ex-
penses on road about 11,152 miles
long, doing about per cent more bust
ness in 1920 than in 1919.
The Southern Pacific measures it's
gross volume of business by adding to
the total number of tons carried one
mile three times the number of pas
sengers carried one mile In other
words, it figures that the work of
carrying three passengers is equivalent
to the work of carrying a ton of
freight.
Measured by this compound unit, the
Southern Pacific did 20,s77,0 900
units of work in 1917, the last year of
private operation. The government
operating the road in 1918 did 2O,S36,-
100000 units of business, and in 1919
20,l9S,000.000 units of business. In
1920, operating part time under the
government and for ten months under
private management the property did
22,0lO,O00,O 900 units of business The
results in dollars and cents are an in
crease from $193 971 900 total revenue
in 1917 to S2s2, 2,270,0 900 operating reve-
nues IN 1920, and an increase from
$12O 100000 operating expenses in 1917
to s242,114,0o0 in 1920 The operating
ratio, which in 1917 was 62.18 per cent,
was 85.77 per cent in 1920.
Increasing Returns
The Southern Pacific annual report
is one of the most comprehensive re-
ports made by American railroads, and
in the detailed figures for 1920 it is
possible to trace many of the same
tendencies which are affecting so seri-
ously all of the railroads of the United
States. 1t may be recalled that julius
Kruttschnitt, chairman of the board
of the Southern Pacific, presented tina
case of all the railroads before the
Congressional committee investigat-
ing the railroad situation; he called
attention to the fact that on a basis
Of 100 for 1900 railway passenger
rates had gone to 150, railway freight
rates to less than 175 and rates Of
Pacific is no exception to this rule, but
the figures are somewhat Offset on the
Southern Pacific by the development
which is taking place in the territory
served Serving California as it does
from the Oregon border to the Mexican.
border, the Southern Pacific has
shared in the development which has
taken place in the state and which has
been comparatively slightly disturbed
even in the last year of general bust
ness depression. The Southern Pacific
is a road still working under the law
of increasing returns.
ures for the operation of the property
regardless of whether the government
or the corporation operated it.
1920. 1919.
Average miles oper-
ated ............ il,lhE ~ 'u95
Freight revenue s1S3.416.52s s1s3.o1l $50
Passenger revenue. 71,70l,63T os,5f4 4,l4o
7 o t operating 80
maintenance Of way
and structures 4s, 465, 46s 34,Saf,1o7
Equipment .... 5s,54s.ss2 4s,o11, ,453
Traffic expenses =. 349o.7o7 2,256661
penses senses t4''0 ...''.... 11z2277ss ss,aso aa1
General expenses 8 5,1l2,652 6,101,I4
Total railway oper-
attng expenses 242 113,79O 1SS,3S5,l72
Taxes ,..,........ 14792,o64 11,s11 995
Railway operating
income. ........ 213l2,344 80. b71,O6S
1920. 1913.
The following table shows the COM
parative income account of the South
ern Pacific Company:
Total operating in
come s;5 sl771s.lOt sa.sSaso'
from government s,o43,2Ss 4S,24t660
Dividend income 5,251.324 1882, e39
Government guar
anty ...,........ 20, 490, 4ZS
Gross income ..... 57.61o,7l6 57,45S, O2o
Interest .......s'. p sag. 48S 22,7oi 121
Net income ...... S2,07o.275 31,54S 607
The gross income as shown IN this
ia bile was increased in 1920 by the in
clusion of $4,000,000 received as divi-
dend on the Southern Pacific Land
Company stock, of which the Southern
Pacific owns the total s5,000,000 par
value of stock.
The Southern Pacifc's balance sheet
as of December 81, 1920, shows an in
crease in stocks of affiliated companies
of $52,3S3 900, which is accounted for
by the fact that the Southern Pacific
had bought the Pacific Oil Company
stock in December and had not yet
December 31) sold it
There was an increase also of S15,-
661 900 in investment in road and prop
erty, and of $14, 100000 in deposits in
lieu of mortgage property sold. The
segregation of the oil properties caused
a writing down Of the miscellaneous
physical property carried on the bal
ance sheet at $32, 2,550,000 at the end of
1919 to $13, 1926, decrease of $18,-
765,000 by the end of 1920.
Current Assets High
Current assets total s99, ,982 900, which
includes $1e,4b3, 600 cash. Since the
close of the year the company has re-
ceived $5O,000,0 900 cash for its oil stock
The company had S40,363, 900 material
and supplies on hand at the end of the
year.
According to the Southern Pacific