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EGINNING February 1, 1922, employes are offered opportunity to buy shares of the capital stock of the Company on easy terms. This is a plain business proposition, providing a convenient way for all officers and employes who desire to set aside regularly a part of their pay for investment in Southern Pacific capital stock, so they may thus become part owners as well as employes.

The Company makes no appeal to employes to purchase stock. No employe will be either favored or discriminated against because of his purchase. or failure to purchase stock under this purely voluntary plan. Employe purchasers, or their estates, are protected against loss in event of death or permanent disability or in case of leaving the service of the Company, voluntarily or otherwise.

The Company has no stock in its treasury. All of its stock is in the hands of the public (about 54,000 holders), and the present proposal is intended to make it easy for employes to buy Southern Pacific stock in the open market.

The Company, of course, cannot control the future market price of the stock or the amount it will be able to pay in dividends, as earnings largely decide that.

Here is the plan: Any employe may apply for the purchase of from one to fifteen shares of stock, according to his ability to pay for it. If, after having begun the purchase of a less number than fifteen shares, an employe desires to buy additional shares to the limit of fifteen, that can be arranged for him. After having completed any specified purchase the employe may then begin to buy additional shares, but under no circumstances may an employe be buying, under this plan, a total of more than 15 shares at any one time, although he is not limited as to the total number he may finally purchase.

To take advantage of the plan the employe should make application on the regular forms provided by the Company through his immediate employing officer, by whom such application will be sent without delay through the proper channels to the Controller of the Company at New York. The Controller will then arrange for the Treasurer to purchase at once the designated number of shares. at the market price on the New York Stock Exchange and the employe will be sent a statement as to the cost. No charge is made for this service.

The stock will be paid for by the employe at the rate of $5 a month on each share until the purchase is completed, such payments to be deducted from his wages once a month. However, the employe has the privilege of paying off in lump sum the unpaid balance on his stock at any time.

The Company will charge the employe 6 per cent. interest on the cost of stock purchased for his account, but will credit him with dividends paid on the shares held for him. Dividends have been paid. regularly since June 30, 1907, at rate of $1.50 a quarter, or $6 a share annually. At the market price of the stocks when this is written, about $81.50, this rate of dividends gives a return of not quite 7 1-2 per cent on the investment. Thus, dividends will more than offset charges made for interest.

These dividends are payable to stockholders according to record of the Company at close of business on last day of second month preceding the month in which dividend is payable. For example, a stockholder to receive the dividend payment on April 1st, 1922, must be owner of the stock at close of business on last day of February, 1922, and be so shown on the books. Any stock purchased and. transferred on the books of the Company between. the last day of February and first day of April will not be entitled to receive dividend payment on April 1st, but will receive dividend payment due July 1st.

Failure to pay three successive installments by an employe who remains in the service will terminate that employe's right to complete the purchase. In such a case the stock purchased for his account will be sold at the market price and the resulting balance paid to the employe in cash.

In the event of permanent disability or death of an employe before his stock is fully paid for, the employe or his estate may complete the purchase in monthly installments or lump sum and receive the stock; or may receive the number of shares then fully paid for, and any fractional amount left over in cash.

In case an employe leaves the service of the Company, voluntarily or otherwise, he has the option of paving off the unpaid balance in cash an! receiving the entire amount of stock being held for him, or of receiving the number of shares then fully paid for and any fractional amount left over in cash.

The Company reserves the right to amend or withdraw this stock purchasing plan at any time: provided, however, that any such amendment or withdrawal shall not apply to stock purchases already made for account of employes.

The stock purchasing plan is available to all employes, including officers, of the Southern Pacific Company and all Proprietary Companies whose lines form a part of the Southern Pacific Transportation System.

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By A. D. WILLIAMS

HENEVER one pauses to consider the history of the organization and growth of the Southern Pacific Company, the Sacramento General Shops should be remembered, for they sprang into existence with the parent organization, the Central Pacific Company, in 1863 and have kept pace with the growth of the Southern Pacific Lines.

In 1863 these shops employed about 15 men in the Car Department and about the same number in the Locomotive Department. The first permanent buildings were erected in the years 1868 and 1869 and formed the nucleus of the present plant. The shops now cover an area of approximately 145 acres and employ a normal force of 3100 men, this growth spreading over a period of over half a century.

Since the beginning repair work on locomotives and cars has been taken care of and the production of new equipment followed up at the same time. The first locomotives to be built at these shops were 10 freight locomotives and two passenger locomotives in the years 1872 and 1873. From then to 1888 a large number were built, the most of them being "Monkey Motions." These did away with the "Stephenson"

or link motion, and were quite similar to the "Walschaert" motion of today. During the world war the difficulty of obtaining rolling stock and the high price of the same made it imperative that we help ourselves and from 1917 to the present time 53 locomotives have been constructed in these shops.

First "Twelve Wheeler"

In 1882 a "Twelve Wheeler" was built which was at that time the heaviest locomotive owned by this company. It weighed 69 tons and had a tractive power of 29,140 lbs. Today we have single engines weighing 193 tons with a tractive power of 75,150 lbs. and Mallet or articulated engines weighing 219 tons with a tractive power of 94880 lbs.

The first passenger cars operated by this company were shipped around Cape Horn in sections as were the locomotives and put together at Sacramento. These cars were 42 ft. long, little larger than a box car, with flat roofs and wooden seats of the plainest character. Since then constant improvements have been made. In 1847 twenty first class passenger coaches were built which were acknowledged at that time for design and workmanship to be the best and neatest in America. Many cars have

A. D. WILLIAMS

been built since but none have given better service or longer life. Several of these cars are still in existence in our Maintainance of Way service.

The first private car was built about this time for Supt. A. N. Towne. In 1876 a number of short street cars were built for use in San Francisco as there were no car builders on the coast at that time. In 1883 the car "Stanford" was built for the sole use of the late Governor Stanford. This car when received at Washington was acknowledged by all eastern car builders to be the finest and best built car in America. Every convenience which could be thought of at that time was installed in this car. The interior was finished with choice woods. The frame work was of white oak and the workmanship of the best. In 1906 this company built its first all steel passenger car. This car is No. 1806 and is still in service. The next year we built an all steel postal car, C. P. 4097 besides having an all steel body and underframe the inside lining was of fireproof construction and an electric lighting system was also applied. This car is still in service and no material changes have been made in it.

A very large number of freight and non-revenue cars have been constructed in the last 40 years. In the last four years about 3000 have been constructed.

Steamer Machinery

While a good many of the steamers which this company uses in the

Bay and River service were purchased, a very considerable number of them have been built at the Company's ship yards in Oakland and the most of the metal work furnished from Sacramento shops. The boilers and all metal work for the steamer Solano with the exception of the engines proper and the wheel shafts were gotten out here. At the time this boat was built in 1879 it was the largest car transfer boat in existence. About the same time all the machinery, boilers and metal work for the river boats Modoc and Apache was gotten out at these shops. In later years the machinery and boilers for the Seminole, Navajo, Thoroughfare, Alameda, Santa Clara and Contra Costa were also built here.

In 1863 the shops proper consisted of a small repair shop for locomotives and another for cars. The machinery of the shop of Goss and Lambert on I street in Sacramento was utilized. Few years later this shop was taken over by the company and the machinery moved to the present site. An iron foundry was built which was put into operation in 1868. Since that time all the general iron casting used for cars, locomotives and steamer work have been made at Sacramento. The present foundry is divided into two sections, one specializing in wheels for freight cars and the other doing miscellaneous work.

The Wheel Foundry

When under full operation 300 standard wheels are made in the wheel foundry every day, requiring about 125 tons of molten iron. This is made from pig iron in a large furnace known as a cupola. This consists of a long steel shell, 90 in. in diameter, with a high stack. A lining of fire brick runs from the bottom to the top of the stack. Coke is thrown into this cupola, followed by a layer of pig iron, this method being followed until the furnace is full. A fire is then started at the bottom, and as soon as the lower layer of coke becomes ignited the air blast is turned on which strikes this hot coke. A very high temperature is thus obtained which is sufficient to melt the pig iron which drips into the furnace bottom. As soon as enough is collected the cupola is "tapped" and this metal allowed to run into a large pot. From this smaller amounts are taken for the pouring of the wheels. As the coke burns out and the iron melts more coke and iron are thrown in. This process continues through the day until the required number of castings have been made, when the