Evening star., 1938-02-17
REPORTS
DROP IN EARNINGS
Freight Traffic Decrease
and Higher Costs Cut 1887
Net Operating Income.
Srettal Dispatch to The Star.

SEGt'dl DlSphtCn 10 Ing SLdE.
PHILADELPHIA, Feb. 17.-Sharp
declines in the freight traffic of the
Pennsylvania Railroad in the last four
months of 1887, together with steadily
advancing operating costs, more than
offset trafflc gains made earlier in the
year, so that results Of the full years
operations show decrease of $11,l79,-
666. or 1873 per cent in net railway
operating income as compared with
1886.
The company's report for the year
1887, made public today, reveals that
operating revenues increased $14.-
sos, 8,320, or 3.3 per cent while operat-
ing expenses advanced $23.8s3, ,592,
due to higher wage scales, advancing
costs Of materials and fuel, and heavier
expenditures for equipment and road
way maintenance in the spring and
summer when traffic was moving in
heavier volume.
Freight revenues increased "a per
cent and passenger revenues 81 per
cent for the year. The net railway
operating income of $73,000,927 repre-
sented a return of only 28 per cent
upon the investment in road and equip
ment.
Decline Late in Year.
The extent of the traffic decline in
the latter part of 1887, which so
seriously affected the years results,
is indicated by the fact that freight
revenues in December showed a de-
crease of 32.7 per cent as compared
with December of 1896.
1t is estimated that the company's
gross and net income also were reduced
approximately SIS 900, 900 by the elm
ination, as of December 81, 1886, under
order of the Interstate Commerce
Commission, of the so-callad emer-
gency charges on freight trafic.
Transportation expense represent
ing the actual cost of moving the
traffic. increased $l1 1852 1928, rejecting,
in common with other increased items
Of expense, wage increases and ad-
vancing material costs.
Taxes of all kinds continued to in
crease, recording an advance of $4,-
6l8.602 over 1896. Taxes in 1887 took
more than 8ia cents out of each
dollar of operating revenues. and were
equivalent to per cent, or 50 per
share on the stock.
Surplus Shows Decrease.
After deducting interest payments,
rent for leased roads and miscellaneous
charges and appropriations to sinking
and other reserve funds. ETC., there
remained a surplus Of $l9.134,172, a
decrease of sl2,265,l79 as compared
with 1885. The surplus for the year
represented 20 per cent on the capital
stock as compared with 4.8 per cent
in 1896. The surplus per share (par
$500 was sl.45, compared with s2.38
in 1886.
Out OF the surplus, $l6.459,692 was
paid to stockholders in two dividends.
aggregating 2l2 per cent. the first on
July % of per cent 80 cents per
share). and the second on December
20 of ~ per cent (75 cents per share)
Dividends Of 2 per cent were charged
against income for 1886. The re-
mainder of the surplus, s2,674,48o,
was added to profit and loss.
A strong note of warning to the
stockholders is sounded in the general
remarks on the large number of bills
confronting Congress and the State
Legislatures which would adversely af-
feet the industry President Clement
names. among others. bills for the
establishment Of six-hour day, excess
crew bills and train limit bills.