Atchison, Topeka & Santa Fe Railroad Company-Consolid. System. General Account, June 30th, 1891.

Interest on bonds accrued, but not now due:

Interest declared earned on income bonds for year ending June 30, 1891
Interest on bonds not called for exchange

Taxes accrued:

* Includes bonds assented and not yet deposited This amount has been reduced since June 30 to $1,674,315.00,

The commodity movement in the fiscal years to June 30, 1890, and 1891 shows that, while there was a decrease in grain movement in the year to June 30, 1891, following the poor crop year of 1890, the tonnage of merchandise, manufactures, coal, lumber, ores, etc., which truthfully indicates the prosperity of a new country and the substantial basis for the development of the traffic of a railway system, increased handsomely in the year now reported, and this illustrates an actual and healthy growth and prosperity, not spasmodic.

Products of agriculture above noted include grain of all descriptions, cotton, etc., and the entire movement for the year to June 30, 1891, was, of grain but 1008 per cent. and of other agricultural products 8.98 per cent., a total of but 19.06 per cent. of the aggregate tonnage hauled. While the products dependent upon crop conditions showed a decrease of 438,312.2 tons, commodities not affected by weather, but following growing population and necessities. increased 583.308.8 tons. The latter traffic will steadily increase; while, with the promising large hauls from products of agriculture for the current year, the business of your lines should be large. The fact also is exemplified from the foregoing that the Atchison system of railroads is now serving its patrons instead of drawing from them only, as formerly, which is bringing it nearer in character to the large Eastern railway systems in the older and more settled parts of the country. In connection with freight traffic movement during the year ended June 30, 1891, it is well to note that the average rate of freight shows an increase over that of the previous year of 37-1,000 of a cent per ton per mile, and the average haul per ton an increase of 8:49 miles.

For a line in a new country the Atchison is in a very satisfactory condition. I went over most of its main roads during the latter half of 1891, and found everywhere signs of recent improvements and of careful and judicious management. Mr. Allen Manvel, the president, has had a good school, for he was traffic manager of the St. Paul, Minneapolis and Manitoba RR. under Mr. James J. Hill, than whom there is no greater master of detail nor a better manager among American railroad presidents. The main

American Railroads.

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line from Kansas City to Chicago is one of the best in the West, and those in Kansas as well as the St. Louis and San Francisco system have recently undergone extensive improvements which cannot fail to reduce operating expenses. The rolling stock is satisfactory as regards quality but a trifle deficient in quantity; arrangements have, however, been made for considerable additions.

The foregoing tabular and other statements relate to the consolidated system, which includes all lines except the St. Louis and San Francisco and the Colorado Midland: these two are operated separately because their bonded debt has not been assumed by the Atchison, although this company owns their stock. A few cursory remarks will suffice in the case of all subsidiary companies save the Atlantic and Pacific and the two leased systems. Their shares are almost exclusively owned by the Atchison, among the assets of which they figure (see balance sheet) and are either held by that company itself or deposited as collateral. The direct return is but small, being only some $785,000 on stock and bonds with a face value of $138,000,000 which have cost the company $68,600,000, but of course there are indirect gains to offset this loss, although it would be difficult to say to what extent.

The Gulf, Colorado and Sante Fe was added to the system in 1886 and embraces all lines in Texas, 1,058 miles. The Kansas City Belt Railway, but few miles long, is half owned by the Atchison, and provides the company with terminal accommodation in Kansas City. 1 The St. Louis, Colorado und Kunsus Ci'y is a small local line near St. Louis. The Sonora Railway system lies in Mexico and Arizona, connects El Paso with Guyamas on the Gulf of California, and is 350 miles long; it is endowed with a subsidy by the Mexican Government, which owed to it on August 1, 1890, $1,681,400 in Mexican currency, this debt being gradually reduced by monthly payments of $30,000. The company opened its line in 1882 and has been controlled by the Atchison from the time of its construction The Southern California Ry. owns 475 miles of railroad in Southern California, radiating from Los Angelos and connecting with various points along the coast and throughout the fruit belt of Los Angelos and San Bernardino counties. These districts produce vast quantities of superior fruit, which is mostly canned and shipped in Cape Horn because railway rates are too high; nevertheless the fruit traffic of the Atchison grows uninterruptedly and is capable of considerable development

1 The Kansas City, Fort Scott & Memphis and M. K. & T. are part owners of this RR.

if it can be conducted at a profit with low rates. The Atchison is further interested in several elevators and mining properties, notably in coal mines in Colorado and New Mexico which provide frei.ht and fuel for its Western lines. THE ATLANTIC AND PACIFIC RR.

was chartered as early as 27th July, 1866. and, like other Pacific roads, received from Congress land grants in the same ratio to the mileage completed as on the Northern Pacific - namely. 25,600 acres for each mile completed in Territories and 12,800 acres for each mile completed in States.

Of this railroad only a few miles were built before it was befallen by financial embarrassments which caused construction to be discontinued. In 1870 the company amalgamated with the South Pacific of Missouri, but the consolidation was pronounced illegal by the Courts; in 1876 both were absorbed by the St. Louis and San Francisco RR. (q. v) but this company likewise lacked the funds essential to continue the work, which was started in 1867 and not resumed until the At hison had become interested in the scheme. The latter induced the St. Louis and San Francisco to transfer to it one-half of its interest in the A. & P., and this proposal being accepted, both companies in 1880 offered to their shareholders $10000,000 first mortgage bonds of the A. & P. at par and with a bonus of 50 per cent. in income bonds; the companies, however, reserving the right to cancel these bonds until 40 per cent. was paid up, in which case the applicants could retain the incomes. This right was taken advantage of in 1881 when 6 per cent. Western division bonds were offered. At that time Gould and Huntingdon controlled the S. L. and S. F., the former to prevent the extension of that company into the Indian Territory, the latter to restrain the Atlantic and Pacific, managed by the S. L. and S. F., from building a line to San Francisco which would compete with his Southern Pacific, which see. Both capitalists achieved their purpose, an understanding with the Atchison being arrived at according to which the line was to be extended only as far as the Needles, whence the Southern Pacific would build a branch to Mojave, on the Southern Pacific; the A. & P. was to obtain running powers over the S. P. line to San Francisco. In 1883 the road was completed as far as the Needles, funds having in the meantime heen obtained by issuing bonds and by borrowing from the Atchison and S. L. & S. F. In 1883 the capital of the company consisted of $26,080,210 bonds of several descriptions, mostly guaranteed by the two companies, and $51,510,300 in shares; there was also a floating debt of some $3,000,000. In 1884 the company purchased from the Southern Pacific its branch from the Needles to Mojave for $7,271 000, but cannot take possession of the property until the bonds issued thereon expire in 1905. Until then the A. & P pays 6 per cent. on the purchase price ($436,266) by way of rental, payment being guaranteed by the two proprietary companies. In 1890 the purchase of the S. L. & S. F. shares by the Atchison caused the A. & P. to pass entirely into the latter's control; both companies guarantee 25 per cent. of gross earnings, and as operating expenses amount to well-nigh 100 p.c. of gross receipts ($3,253,977 in 1891) the lessees have to pay some $800,000 by way of annual rental; in addition they are called upon to carry into effect their guarantee of the bonds, of which many are in possession of the two companies. The capitalisation now, amounts to $79,760,300 stock ($1,478,700 preferred) and $38,913,534 bonds; the debt to the Atchison and St. L. & S. F. companies amounts to $10,841,921, the deficit for 1891 was $1,796,509, and the total deficit up to July 31st, 1891, $8,874 656. The company received a land grant of 20,295,296 acres, of which it has sold 5,324,181 acres; the proceeds from these sales are included among earnings.

It will be seen from the foregoing that the ownership of the A. & P. results in a considerable direct loss to the Atchison, but presumably this is more than offset indirectly At Barstow the A. & P. connects with the Southern California, which is likewise part of the Atchison, and this system as well as the San Francisco connection gives the Atchison a growing traffic at good rates

which is carried over long distances by the controlling company. The A. & P. lines are 947 miles long, the main track from Isleta to Mojave covering 835 miles; there is also a road 112 miles long in the Indian Territory, not connecting with the main line but with the St. L. and S. F.

It was at first intended to connect this with the main line to the Needles, but owing to the Huntingdon régime the project was dropped.

THE ST. LOUIS AND SAN FRANCISCO RR.

The present main line of this company was the Southwestern line of the Pacific RR. of Missouri mentioned on p. 592 and was therefore part of the system which gradually developed into the Missouri Pacific. As is mentioned in Chap. XLI this Southwestern branch was seized by the State of Missouri in consequence of the inability of the Pac. Ry. to repay an advance of $7,000,000 and sold in 1866. The purchasers pledged themselves to complete the main line, but as they were unable to redeem this promise the property was again sold in 1868, the buyer being the South Pacific of Missouri, which in 1870 was acquired by the Atlantic and Pacific (see above). The South Pacific had completed the line as far as Pierce City, Mo., and the Atlantic and Pacific extended it to Vinita on the Missouri, Kansas and Texas. The A. & P. was a considerable system then, although it had scarcely begun to build the line to the Pacific coast for which it had obtained a charter; it leased the Pacific Ry. of Missouri, but being unable to pay the rental, in 1875 the entire concein went into the hands of a receiver, and a reorganisation or rather dissolution of the company followed in 1876. The Pacific Ry. of Mo. regained its independence and developed into the Missouri Pacific, and the Vinita lines became the property of the St. Louis and San Francisco RR.

Until 1879 the company had no other property than the line from St. Louis to Vinita, but in that year extension commenced, the company buying the charters of several railways on which construction had not yet begun. Having done this it began to build a line to Wichita, a town which was being boomed just then, and another connecting with the coal mines near Joplin, Kan., etc. In the same year the new Atlantic and Pacific was organised (q. v.) but owing to lack of funds the project of extending this line to the Pacific coast could not be carried out until the Atchison offered its assistance in 1876, a fact to which reference has been made in the preceding pages. In 1882 Gould and Huntingdon bought a majority of shares, the former to prevent extensions in the Indian Territory, the latter to retain his monopoly of traffic with San Francisco. These two gentlemen having achieved their respective purposes they sold their interest, and after some time this was acquired by the Atchison, which in 1890 purchased the common and preferred stock ($10,000,000 pref. and $35,500,000 common) and issued $27,000,000 of its own stock instead. There were also $4,500,000 first preferred S. L. and S. F. shares which were exchanged into 4 p. c. general mortgage bonds guaranteed by the Atchison. These bonds were part of the issue of $50.000 000 authorised in 1890; $36,077,500 are reserved to retire older descriptions as they fall due, and the residue of $13,922.500 is reserved for exchange of the first preferred stock ($4,500,000) for retirement of Atlantic and Pacific second sixes ($2,800.00) and for betterments ($6,622,000). These betterments were urgently wanted, the company being, before the issue of this general mortgage, compelled to pay out of earnings for betterments which it could not do without. Subjoined are the customary tables, showing earnings, expenses, income account and balance sheet; statement of funded debt and share capital is included in the balance sheet, and fixed charges are shown on income account. The year 1891 closed with an apparent deficit of $99,344, and in addition there was a loss on the A. & P. RR. amounting to $650,129 in 1890-91, thus making

1 See Chap XXXIX.