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Show H I OGDEN REMAINS THE GATEWAY. H) H j The Railway Age Gazette, in its issue of September 15, com- H pares the Union Pacific and Denver & Rio Grande railroads and H reaches the conclusion that the Gould road cannot compete with H the ITarriman lines for transcontinental business. The Gazette Hj ; "The D. & R. G. now forms the connecting link between the H , I 3issouri Pacific at Pueblo, Colo., and the Western Pacific at Salt H -3 Lake City, Utah. To handle through business the Denver & Rio H ' i. Grande has got to compete directly with the Union Pacific; and H regardless of whether or not the Western Pacific is as well built H i ; and can be as economically operated as its competitor, the Southern H Pacific, between Salt Lake City and the Pacific coast, the D. & R. H , G. itself has got to be able to handle its through business in suchi M . a vay as to make a favorable comparison with the Union Pacific. H) 'i Otherwise the Gould system of roads cannot successfully compete m j for through traffic, on tho theory that a chain is no stronger ihan H its weakest link. m i "In the fiscal year ended June U0, 3911, the Denver & Rio H i ! Grande earned $23,400,000 gross, as compared with $23,600,000 in H 1 1 the previous year. Operating expenses amounted to $15,960,000 H l last year and to $lo,S00,000 the year before; so that, after the pay- H I ' ment of taxes and clearing outside operations, operating income H I j amounted last year to $6,550,000 as against $6,956,000. The company H 1 1 paid its fixed charges and annual dividends of 5 per cent of the H I preferred stock in 1910, but after the payment of 2 1-2 per cent on H m-1 ' th'c preferred in the first half of the past year, the second semi- H I j flnnual payment on the preferred was passed, so that in 3911" the H B ' company had a surplus of $1,11S,000 as' against a surplus of $399,000 H H in 1910. But President Jeffry, in his annual report, says that $1,- M 248,000 semi-annual interest, due September 1, 1931, on the $50,000.- H 000 Western Pacific first mortgage 5 per cent bonds, will have to B. be paid by the D. & R. G-. ; thus actually, instead "of a surplus the H .. company -will have a small deficit. fc "The Western Pacific has been in operation, or at least has H published through, tariffs, sinec 1910, but up to June of this year H N- the results were a disappointment. There had been floods in the Hj Humboldt valley and a series of storms on Great Salt Lake -which H had seriously interfered with traffic ;and again early in January. H - 1911, rains in the mountain districts in California caused frequent H ' slides in the deep cuts and the settling of some of the heavy cm- H r I bankments, so that during a good part of the winter and early Hr spring train movement was uncertain. Beginning with the month of H July, the Western Pacific is to make public its earnings, and the H Denver & Rio Grande estimates that these earnings for July will H bo about $420,000. If the road did not earn more than this per H month it would have to operate at something better than 50 per H I ' Cent ratio to pay 5 per cent on its $73,000,000 cost of construction. Hi "However, as has already been mentioned, it is the problem of Ht the Denver & Rio Grande itself, rather than that of the Western H Pacific,- that lends especial interest to the report of the company B for 9J1. Any one who has been over the road knows that it has H 4 heavy grades, high degrees of curvature and is not in physical eon- H I dition to compare favorably with the Union Pacific. The territory Hi is difficult. When the road was built, theories of construction had H a quite different trend than they now have, and the quality of H maintenance of the property in the past has, possibly necessarily, H ' not allowed of rebuilding tho line out of earnings, as has been done W with so manj' parts of other roads originally built cheaply or with H ' low standards of construction. Whatever the causes, however, and K how little the officers who are now operating the road are to Bt blame, the fact remains that it would require an expenditure of Hi very many millions of dollars to put the road in shape to compare H favorably with its transcontinental competitor; and apparently the H D. & R. G. simply has not got the money to spend at least at H present. In 1908 a first and refunding mortgage was placed on tho H entire property, the old Rio Grande Western being included under H ', this mortgage, and since that time, $33,944,000 of 5 per cent bonds H secured by this mortgage have been sold; but,' of course, it is neces- H ' sary to provide for the outstanding $7p,667,000 underlying bonds, which cannot be tlone at the present price of Denver & Rio Grande shares." There are two important points brought out in the foregoing to which we direct attention. We are not particularly concerned over the rivalry of the Gould and Ilarriman lines, but we are deeply interested in the question us to whether Ogden is .the only practical prac-tical gateway through this intermountain country to the Pacific coast. The Railway Age Gazette says the Western Pacific has been a big disappointment as a revenue producer and that the Rio Grande cannot expect to successfully compete' with the Union Pacific on through business. That means-' nothing else than that Ogden is to maintain, for years to come, its importance as the doorway, on the central line of transcontinental travel, to the Pacific. |