New-York tribune., 1922-04-04
pennsy Earned
i4.87 Per Cent
/ On Stock lin '2l
In Spite of Reduction i'm
Operating Revenues, Re-
port Shows "A Larger
Net Operating Income
Maintenance Costs Cut
presiden; Believes Manage.
/ meni l. Under Obligation
4 10 Restore 6%o Dividend

s The PENNSYLVANIA Railroad Company
earned s24.307 s63 in 1921 after pay
ing all charges. according 20 a state
itnent issued 10 stockholders tod
This net income WAS at the rate Of
Isl pcr cent Oh the sl99,173,Ao0 OF
tspita stock outstanding Although
'tnc stockholders actually received Az
.rcr cent in dividends during the year.
atnly 4 per cent WAS charged against
sIq9t earnings. since tho first payment
o. ~ per cert prior 20 d reduction IN
the rate from 10 per cent annually
wa made cut Of earnings OF the las'
sduarter Of 1890.
7 The 1921 statement cannot be COM
pared in full with that Of the prcced-
ing wear. because IN 1920 tho company
.lopcrated during the first two months
hinder Federal control and during the
" leuccecding six months under con-
inuance OF the standard guaranty.
|fuil apprcciation of the benefits de-
,1jvod from economies put into effect
ti,st wear is obtainablc, however. by
comparing the purely operating results
af that wear with those of 1921. In
spite Of reduction Of So ,092,lS3 in
operating revenues. the sys' m came
through the year with a net operating
income $103,336,559 greater than IN
1920, a result which was accomplished
bv a reduction Of S190,Si9.o90 IN opcr-
sting expenses. In 1920 there was
net operating deficit of St2,622.483. The
nmnroyemcut in net railway operating
Mnromcs would have been still more
Favorable except for the fact that tax
siccrual. for 1921. amounting to S29,
sts5 .529 showed an increase of nearly
a. 000 900 over the preceding year.
u The principal items which went to
make up the reduction in operating cX-
,nenses we're decrease of $33.i23.a .a79 in
saintenancc Of way and structures,
255.940.394 in maintenance of equip
acnt and sos, ,5G5,7 in transportation
.eyDcnscs. Tho return on the property
for thc Pennsylvania Rail
road Company and its directly operated
',,.rcs last wear was 20 per cent, while
lijor the entire system it was 10 per
Kent. The company finds In these fig
.hres and their relation to the 487
'.per cent earned on the capital stock
Evidence of its long conservative policy
@n finance. a policy which includes the
cash premiums paid IN or original sub
scriptiors to capital stock. the prac-
tee OF putting back into property un-
divided profits during previous years
and the payment Of low rates of divi-
Aends in periods Of depression. The
-pennsylyauia system as a whole at the
close Of 1921 had property investment
tof s2IO2 $50 sos, against which there
ilwerc outstanding net securities. in the
Hands Of the public, disregarding
nintercorporatc holdings. amounting TO
htulv siA20, ,775280.
The balance sheet OF the company on
December 81, 1921 showed current as
sots Of $245 ass, 1888 and current labili-
ties aggregating $133,o9l .6S7 Cash on
hand decreased Sl,55S,651 to total of
SIS $50 267
In his statement to the stockholders
President Samuel Rca says. III part:
: "1be controversy With the Shop
Crafts Union has been explained to
the jurisdiction Of the Labor Board
,fas to details Of management is now
ebefore the Fedora court. 1t is hoped
iiihat when this question is settled the
4relatlons with our employees will pass
entirely out of the controversial stage
and that the spirit Of cooperation,
talready so much i'm evidence. will result
am the full DEVELOPMENT of permanent
,hnd satisfactory plan. Certain wages
.snd working conditions are vet much
cut Of line with those in effect prior
% the war and further adjustments
are essential to reduce the cost of
transportation, adequately maintain the
property aid enable the company to
slsy Il fair return to the stockholders
THE employees shared in The high
Wage Of the war period, but the stock
Ioders' dividends were not increased
slurins that period Since the war their
fividends have. been reduced and your
prcctore feel that an obligation rests
On the management t. restore the
her cent dividend as soon As it can be
done without dctrlment TO the main
finance Of the property.
! Thousands Of rate reductions and
Qualifications were made by tho rail
Foads during tho year including gen
PRE- roductlons IN rstes on farm prod
2lcts. These rate reductions. Of course.
Ffnded to deplete the already diminish
rhe revenues Of the carriers, and IT ir
smpo slhle to sec how any further
general reductions in rates can be made
without corresponding decreases in the
Cost of 'qhor