Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-12-19
W.B. STOREY PLAYED BIG PART
IN ATCT1ISON'S RECORD YEAR
Western Rail President Thinks Roads
Should Expand in Advance of Territory
They Serve-Railroad Issues.

railroad was less affected by the COM
petition Of the Panama Canal than
the transcontinental roads OF the
North.
I'VE feel the Panama Canal oom-
petition" replied Mr.. Storey, and
our earnings would be seriously affect
ed II we depended for the most part
upon California, but we go through
rich intermediate territory which
originates profitable freight.
Cynosure Of Speculation.
Because of It's huge surplus and I'm
precedented current earning power.
Atchison, Topeka & Santa Fe has been
a cynosure of spectators. and has &C
cordingly been subject to Wall Street
rumors of melon cutting and increased
cash dividends. Thus far the rumors
have failed to materialize. The board
of directors has been ultra conserva-
tive in Withholding part of the profits
from shareholders and using earnings
to finance the upbuilding OF the sys-
tenn.
MY next question was whether, after
the Atchison board and the Interstate
Commerce Commission agree on val
uation for the road, the company
would undertake to make its outstand-
ing capitalization conform to that fig
ure. On the basis OF it's own book
value, the road is now undercapital-
lied.
In answering the question, Mr..
Storey said: Not necessarily. 1t
seems largely an academic matter, be-
cause If earnings should seem large
on the present capitalization the direc-
tors always have the option OF paying
a larger cash dividend
What is the dividend policy of the
company?" Mr.. Storey was asked.
I'VE paid s per cent on the common
stock for number of years, and last
year raised it TO per cent, said
Mr.. Storey. THAT has been our
policy. There Is nothing further TO
say. We have in recent years been
financing our improvements and ex
tensions out Of earnings, / would
not care to say that we shall always
continue to do so. We certainly, how
ever, are not going to pay out In divi'
iends all we earn when the question
Of possible recapture of so-called ex
cess earnings by the Government re
mains to be determined, when and II
the Interstate Commerce Commission
fixes our valuation"
Think Rates Inadequate.
Asked for his view Of the freight
rate situation. Mr.. Storey, declared
I'VE do not consider rates adequate
In our territory. The Interstate Com
merce Commission has rejected a re
quest of the Western roads for
freight rate increase and is now dis
cussing the question of readjust
ment OF rates. ..-'~'- :,
ANY net reduction in rates would
have q serious effect on the earn
ingg of the Santa Fe. OF course II
should be remembered that the earn
ings of a railroad depend not only on
the basic rates, but on the volume OF
business carried. The present un'
precedented prosperity Of our com,
pany has been ascribable to the grow
ing volume of traffic. There is not
much that the railroads themselves
can do to affect the aggregate volume,
which Is dependent upon the growth
and prosperity of the country. How
ever, in so far as we can affect 1t, we
are trying to do So"
The road will probably earn $13,'
900 900 more than last year. which
was a record breaker. Mr.. Storey
expansion program was reflected In
the capacity of the. road to move a
record breaking volume of freight
rapidly ana take care Of all the sbusi
ness offered. The result of this Is re-
fiected In net earnings. -.-.. n. p 4
(Copyrtuht 1926 -" 49,.