New-York tribune., 1921-06-04
Dividends Earned
BY Union Pacific
/. Without u. s. Aid
Market Value of Other Rail-
road Securities Held by
Company Much Below
Book Value, Report Shows

The Union Pacific operating ratio in
1920 was ~ per cent. This was not
! considered a particularly low racio of
| expenses to revenues prior to 1917. but
II ali OF the larger roads had rs per
cent or lower operating ratio in 1920
there would be no serious railroad
problem facing Congress and those
directly interested in the solvent oper-
| alton Of the 100000 miles of railroads
IN the United States. In 1919 the
Union Pacitic's operating ratio was SO.
With an operating ratio of rs and
with gross revenues of $209 $50 900.
the Union Pacific earned $50 Pei 600
net This is the result of the actual
operation of the property as a railroad,
disregarding any rentals or guaranteed
income which the government owes to
the corporation. Even in it's corpora
tlon income account the Union Pacific
| does not include in the years revenues
$4,661,000, which is the amount guaran-
teed to the company for the six months
March to August, inclusive-over
and above what the company actually
earned. Leaving out this amount, the
net income from railroad proper rites to
the corporation, including rentals for
the first two months and income from
investments, the total income from all
sources was $48,261000, and the
amount available for dividends after
the payment of interest was $32,674,-
| 600. After the payment of per cent
dividends on the preferred there was
an amount equal to $12,90 a share left
| for the common. In 1919 the amount
left for the common was equal to
$1369 a share.
The Union Pacifc's annual report
for 1920 appears to answer the ques-
tion so often asked recently as to
whether there is any railroad common
stock left which is a reasonably safe
| investment. Even were the banking
business of the Union Pacific to be
divorced irony its railroad business, the
| railroad could continue, under the con-
ditions of 1920 to earn interest charges
and fair return on that portion of
the capital stock which represents in
vestment in railroad property.
Half Main Line
The company operates 8,192 miles of
railroad, of which almost exactly half
may be considered main line and the
other half branch lines. Of the main
line mileage, over Is per cent is laid
with the heaviest of modern standard
rail, weighing 100 pounds a yard, and
72 per cent is laid with 90-pound rails
The greater part of the branch line
mileage is laid off with rs and go
pound rail
Apparently, the Union Pacific has
been holding bad order locomotives
out of the shops rather than repair
any that are notsessental to the pres
ent olume of traffic. Thus, at the end
of 1920 % per cent of the locomotives
required repairs, but only little over
7 per cent of the total were in shops, In
1920 the average cost of repairs of all
locom olives was S10,416. 1t was only a
few years ago that an average of $500
was considered high for repairs to
LOGON otives, In only small part is this
tripling of cost due to larger locomo-
tives, and q large part Of it must be
due TO the comparative ineflclency OF
the shop labor, since the whole of 1t
cannot be accounted for by increased
wage schedules and increased cost of
material.
The cost of repairs per car mile was
33 cents in 1920. Here again the cost
has Just about tripled within the last
few years.
Clark's Interest Bought
Recently, it will be remembered, the
Union 1dCluC UOQSH NJ @ ilctAL liiNcAS0S 80
the Los Angeles & Salt Lake, which
had been owned by Senator William a:
Clark. The road had been financed
Jointly by Senator Clark and the Union
Pacific, and the Union Pacific prior to
1921 had owned so per cent of the
stock. The road was built number
of years ago when the Union Pacific
still owned a controlling interest IN
the Southern Pacific and the two were
was not obvious at that time why the
Union Pacific should want second line
from Ogden to California. Whether or
not Mr.. Hartman and his associates
at that time anticipated the possbil-
ity of the application of the Sherman
law to the divorcement of the Union
and Southern Pacific it is impossible
TO say, but as things have worked out
it proved to be a factor of safety.
Heretofore the Union Pacific and
Southern Pacific have worked in har-
monious traffic relations, but as the
stock of the two companies gets fur
ther and further distributed, and
as the two organizations lose the
feeling Of comradeship developed
during the years that the U.
P.-S. P. were the Hartman sys-
tenn, it may be of great Importance
for the Union Pacific to have its own
line to California, Notwithstanding the
fact that the Los Angeles & Salt Lake
develops comparatively little local
traffic and runs through an arid coun-
try with little prospects of ever devel-
oping any local traffic unless it be min
era1 traffic.
The following table shows the prnci-
pal figures for operation of the Union
Pacific Railroad property, disregarding
rentals or guarantees.
1890 1919
Average mileage
operated ........ s,192 S1sS
Freight revenue . .$150f60, 92S s12s. .9t4, 43I
Passenger revenue. 3S.170,277 35,738. 572
I operating
revenue 80 2os,049.51O 17744z698
Maintenance of way
and structures. 34,770,779 25,753,722
Maintenance OF
eoutument 3s8se187 AZ 4so 736