The New York herald., 1921-04-28
PENNSY DIVIDEND
CUT TOPPER CENT.
Annual Interest Rate. Reflect
ing Rail Slump, Is Lowest
in Many Years.
ACTION DECLINES SHARES
Saving of S2.497,828 Is in
Line With Extensive Re-
trenchment Programme.
ACTION DECLINES SHARES

Special Despatch to THE NEW YoEK HERALD.
PHILADELPHIA April 27.-Directors Of
the Pennsylvania Railroad Company
cut it's quarterly dividend to-day from
11a to / per cent. That action placed
the issue on a A per cent. annual basis.
par value $50. and had been expected
by the Street for more than three
months. The dividend was increased
from per cent. to 8 per cent. an
nually In 1900. 61a was paid in 1906
and In 1907. The issue returned to
per cent. basis in 1908 and was
continued at that rate until to-day.
The announcement resulted in the
shares dropping to s3A In New york
and "a In Philadelphia. They closed in
New York at "a on turnover of $1,000
shares.
Only a brief statement was made at
the office of the company after the meet
Ing os its directors in the Broad street
station. It read: "One per cent. pay
able May 81 on stock OF record May q"
BY cutting the dividend one-half OF
1 per cent. the management saves the
road approximately s2,i97.S2s, and at
the same time reduces the incomes OF
more than $4,000 shareholders The
proposed wage reductions before the en-
ployees of the road range from 20 to
q per cent.
Reducing the dividend. bankers point
out. Is part OF the managements pro-
gramme to lower operating and other
expenses to point where the systems
operations will show a profit. and some
Of them believe that It forecasts a re-
duction in freight rates. Those bankers
feel that the management should have
made some announcement concerning
the cut. although the reasons for the
roads reduced operating income have
been apparent for several months
The steady decline in the Pennsyl-
vania Railroads gross receipts and net
operating income since November ap-
pears In the following figures taken
from monthly reports to the Interstate
Commerce Commission:
Net oper.
Gross. Deficit.
November ..... SIS. .1oe,siT sS4.T11 .T8l
December Sc.sps,O6T 5o7 ,522
January.......... A,640.210 l.l59.667
February.-....... S1.$so,9co -,oit,VSl
increase.
In common with all roads Pennsy1-
vania has suffered heavy declines In
traffic and largely increased operating
expenses. The latter for the first two
months of 1921 totailcd $S0.s54,34f.
compared with ss4.542.057 for the cor
responding period OF 1920. The ratio OF
operating expenses TO gross fell from
1871 per cent In the first two months
OF 1920 to 9s.3 per cent. this year.
With the layoff Of $4,000 men since
last September and other operating econ
omies there has been marked reduction
OF expenses. Payroils which In October
amounted to Sl6.000.00 or about 3i.-
500, 900 day. were cut down in Febru-
AIRY to s30.000.000. or about s1.000.oo0
day. The effect of these measures Will
be shown In more marked degree In
the March earnings
Results from operation in 1920 showed
gross revenues Of 1855 6.s80.75S, against
Se.270.945 for 1919, and net operating
deficit OF .42s, compared with net
operating income Of sf3,s0S.663 In 1918.
In 1920 however, the road received COM
pensation from the Government for the
first two months. Government guarantee
for six months and operated for its own
account only the last four months OF tho
year. Thus the road was able TO report
\ 1920 net income after taxes and charges
amounting to s32,s0f,673, equal TO t32S
share on t4s9.17s,t00 outstanding
stock OF par value sb0