1907 - Bradstreet's Review of N.&W. Annual Report

[NW Mailing List]

Roanoke Times - September 18, 1907

BRADSTREET'S REVIEW OF N. & W. ANNUAL REPORT

   The eleventh annual report of the Norfolk and Western, which we 
have noted in these columns, and which reviews the work of the road 
for the fiscal year ending July 1st, meets the encouraging comment of 
Bradstreet's, the most reliable and severely critical financial 
journal published in this country. In its issue of September 15th it 
reviews the report, in part as follows:

   The Norfolk and Western system being one of the typical bituminous 
coal-carrying railways, its annual report is of considerable 
interest. The figures for the twelve months ending June 30 reflect 
the generally prosperous conditions in the industry which is the 
company's main dependence, although the coal shipments over its 
lines, which amounted to 9,400,432 tons, represent a decrease of 
110,007 tons from the year before. This, however, was compensated for 
by the growth of other traffic, the total number of tons of freight 
transported -- 20,183,218 -- showing an increase of 916,684, while 
the number of tons carried one mile each, which was 5,252,561,000. 
meant an increase over 240,000,000 ton-miles. In other words, the 
traffic of the system was the heaviest in its history, and was, 
moreover, accompanied by a slight increase in the average rate per 
ton, which was .495 cent per ton per mile, compared with .481 cent 
the year before. Conditions as regards the volume of business were, 
therefore, calculated to render the Norfolk and Western's year a banner one.
   The increase in gross earnings, equivalent to 9 per cent., was 
offset by the far greater proportionate rise in operating cost, which 
was over 14 per cent., thereby rendering the net gain merely 
fractional. In fact, this company, in common with all the leading 
railroad systems, found that the enhanced prices for material, fuel 
and labor practically offset the very favorable traffic conditions, 
while there was also an increase of $600,000 in charges and $33,000 
in the amount required to make up the deficit on the obligations of 
the Pocahontas Coal Company and similar payments. Hence it results 
that the balance applicable to dividends was nearly $1,000,000 
smaller. In the face of this, however, the management saw fit to 
increase the dividend rate on the common stock, putting that issue 
upon a 5 per cent basis, instead of one of 4 per cent. The surplus 
available for improvements and new equipment during the year was cut 
down by $1,700,000, the total charged to that item being $1,246,000, 
against nearly $3,000,000 the year before, and comparing poorly with 
the larger amounts which each successive annual report has shown 
heretofore as being devoted to such purposes by this company. In 
other words, the report tends to create the impression that the 
policy of increasing the common dividend last year was not fully 
justified by the actual results of the road's operations.

-----------------------------------

- Ron Davis, Roger Link