nii'^rFi.l

May 26,1895





Record  and   Guide,







ESTABLISHED-^ M.ftRPH 21^^ 1868,

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Vol. LV.





MAY 25, 1895.





No. 1,419





For Brooklyn matter, see Brooklyn Department immediateli' followino
New Jersey records {page 896).

THE stock market has had its reaction and all the harm frost.
could do to prices, it may reasonably be concluded, has been
done. Having had the bad news of the crop situation we raay
expect to have the good which is sure to I'ollovF the eud of the
cold snap and the return of warm weather, to stay now it may
be hoped. If this should be the case, ic will soon be fiumd that
the position of the farmer has been very much bettered in the
past fortnight, because it is impossible that any fi'ost at this
time of the year can have done enough damage to offset the rise
in the price of produce that it caused, and because it will affect
the gi-ain iu the farmer's bauds as well as that he expects to
harvest later ou. This view of the case act-ounts for the
strength of the gi'anger stocks under the alarm that was
created by the record of the- weather bureau. It is worth
while pointing out, though it has been urged so often before,
that the success of railroads in the strictly agricultural region.s
dependa O'l a protitable crop. Wheu, as we have seen in the
past year, wheat sells belo"" the cost of production it follows
as plain as print that there is, or is going to be, distress and com¬
mercial prostration in the regions where wheat is the staple
product, even though preceding harvests yielded uot ungener¬
ously, and wheu, with even a moderate crop, prices are paying
ones to the farmer, the buying power of the communit.y is good
with the result that the miscellany of freight necessary to the
profitable existence of a railroad is created. Bond-buying has
recommenced with considerable vigor and promises to put all
good issues up iu a way that will make returns on investments
8m.aller than ever known before. The advance in prices iu the
ti'on trade is also another favorable feature of the situatiou,
especially as it is accompanied by reports of increased demaud
in some lines. Other signs, equally agreeable, cau be found by
those who choose to search and they will all have their influence
on figures in the secuiity market.





R'





the prize she has been striving for for yeai's. Later, when the
Japanese shall have recuperated and strengthened their forces,
the success of the larger power may not be so iuevitable. There
ia oue result of this phase of the Eastern situation which seems
to be overlooked, and that is that Russia must abandon ht-r am¬
bition either toward India or toward China. She would be
helpless against England and Japan in coalition. Which will
she do^





The Fublio and the Eailroads.

THE Southern Pacific report for 1S94 has two very promin¬
ent features, oue pertaining exclusively to itself and the
other having, of course, a personal signiBcance, but also a bear¬
ing on the benefits of the railroad iu general toward the public
and its policy toward them. The first is the way in which thia
vast property was managed during a very trying year so as to
meet all its responsibilities aud even to show a surplus. The
secoud of these feature.'^ appears iu a fact which may be adduced
from the figures contained in the report, that the operation of
this railroad, wiih ita affiliated lines by land and water making
altogether a transportation system of 13,000 miles, has beeu
carried ou almost entirely for the good of the public; in other
words, the positiou of the stock caunot be said to be a bit better
than it was when first issued.

Taking the whole system operated, and setting results in com¬
pariaon with the year 1893, there was a falling off last year of
$3,277,545 in gross earniuga, $1,170,507 iu ojieratiug expenses,
and $2,107,037 iu net earuinga; reductions in other receipts
increased the loas of income to .$2,107,840 ; charges against in¬
come decreased $1,338,447, leaving a surplus of $769,302.
This must be accepted as a satisfactory result considering the
fortunes that have attended other Southwestern roads, notably
the Atchison, which did not come near earning fixed charges in
1894, even though it has to be admitted that the surplus would
not have beeu so large if (he eame amount had heeu expended
for betterments and additions as it has hitherto been cnstoraai^
to expend. In 1893 this item amoanted to $311,-567, and last
year to ouly $11,149. Payments for taxes also were reduced
$243,471, and there are other items in the atatement that sug¬
gest that the bookkeeper was called iu to stretch the blanket
over the year's doiugs. Tliese matters are trivial in comparison
with the exteut of the operatious of this property, as cm be seen
when it is stated that the gross earnings of laet year amounted
to the enormous sum of $44,772,003, and it ie fair to assiHue
that, taken all in all, both ends met.

Mr. C. P. Huutiugton, in dealing with the causes of the de¬
cline iu earnings, mentions the strike of last year, rate cutting,
the partial failure of the California wheat harvest and the ac¬
companying low prices obtained for the grain, and the atti¬
tude of the public in the -several states througii which the
Southeru Pacific properties run. He says: "The attitude
of the people of Louisiana toward the railroad iuter¬
ests has ever been characterized by a manifest disposi¬
tion to treat them with entire justice. In Texas a better
understandiug of the mutuality of interests between the
railroads and the material prosperity of the State is rapidly
gaining ground, aud as tlus grows better counael toward rail¬
road interests will prevail. In California the general busiuess
depression aud certain hostile inlerests have done much toward
prejudicing a portion of the public against the railroads, but
with the return of better times this prejudice will undoubtedly
disappear." These are the expressions of one whose position ia
too delicate to pennit him to openly express his whole opinion
or to treat the subject in other than diplomatic terms. Those
vrho have studied the question of the relations of the interests
of the railroads individually with those of the communities
through which tbey mu know that one suffers with Ihe other.
Unfairness toward railroad investments bars out other invest¬
ments, and prevents development to the injury of the whole
community. Jf an example were wanted it could be found iu
the South, which to-day is recovering in prosperity just in pro¬
portion as the states composing it become convinced of the ex¬
pediency of dealing honestly and justly by capital.

If any argument were needed to show that the public bas re¬
ceived most of the advantage of the operation of the railroads
of the countiy, it cau be fouud iu the repoits of the Southern
Pacific as well as iu the reduclion aud passing of dividends and
the bankruptcies which will make the past two years notable in
railroad history. There is no charge thatthe Southern Pacific
has uot been honestly manaced. It may be urged that the
bonded capital of railroads is usually more thau the cost ot'
buikling, and that when interest is earned on that a fair returu
is obtained on the business. If that were so, it is not the whole
case, beoause the bonded is a fixed capitalization, and unless
some value is giveu to ihe stock by profits there can be none of
that success in tlie form of iucrementary value that everyone
hopes to see the year bring wheu he sets out on auy commercial
undertaking. Lookiug at the results of the business of the
Southern Pacific Compauy siuce it was organized ten years ag»,





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