The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1904-05-30
RAILROAD NEWS.
Railroad Earnings Again on the
Upward Road.
Business Depression Proves to
Be Temporary.
GROSS is INCREASING.
Most Roads Now in Shape to
Make Good Showing.
Physical Condition of Railroads
Better Than Ever Before.

The problem of understanding rail-
road earnings and prospects for the
near future, usually comparatively
simple, has for some months been of
the most complex and confusing sort.
Competent judges have misjudged
the ability of our railroads to main
tain high records for gross earnings,
and resulting net earnings have upset
most calculations. In saying this it is
submitted that predictions have most
all been of a pessimistic character,
and that results have been more IA
vorable than expectations.
For brief period during January
and February gross earnings de-
creased so much that there was con-
siderable alarm among investors
Every one knew that the abnormal
weather was the specific cause of the
tremendous decreases among north
ern railroads. But people knew, too,
because precedent had been looked
into, that the early months of 1904
should reflect the business depression
which had become general in the
country during the preceding few
months. Therefore it was perpIexing
to decide how much of the decreased
earnings were a reflection of general
conditions. Meantime there We're not
few who believed that gross earn
ings were only temporarily reduced
and that the earning power of rail-
roads was as great as ever; this would
mean that the commercial depression
had not been very serious and that
therefore, pessimism upon the stabil-
ity of railroad investments has been
unwarranted. An appreciation of the
real conditions is obviously very vital
to correct reading of investment
values.
We know now that gross earnings,
the country over, decreased an almost
imperceptible amount during March.
ut IN ir,s-
ig the last week of that month. And
we know, also that normal conditions
are now prevailing. 1t is manifestly
fairer to base opinions upon present
natural earnings than upon the tenn
poIary diScOurag ementS of the winter
months. 1t is not right to reason the
same in 1904 as was proper in 1884
or in 1894. Those were years of Sc
we're contraction in railroad earnings,
following business reaction of six
months before. The changed business
methods of the past decade bring
cause nearer to effect The cloSeness
OF instantaneous communication and
the correlation of business centerS
and business interests has made seri-
Gus ups and downs in business less
frequent, and railroad earnings change
more nearly with the times than as a
reflection of past conditions Thus it
| is that the outlook for gross earnings
is now very largely in line with the
outlook for general business. Cur
AFFAIRS
is rose cOlored. No one expects i'm
mediate resumption of boom times,
but most critics believe the crisis of
the depression is past, however slow
the recovery may be. Hence it is sug-
gested that, if earnings now maintain
old standards, no great reduction may
be generally looked for in gross dur
ing the time before business again
shall look up and earnings again shall
increase.
The complaint that economies have
not yet been shown is answered by the
statement that economical operation is
impossible, While roadbed is still torn
up for the Installation of improve
mentS. But now that one railroad af
ter another is announcing the compile
ton of its principal programme of bet
terments, the resultant economies will
be expected. And the gradual compile
ton of large OUTLAWS will exercise an
additional restraint upon the expense
account. Investors, not understanding
the situation, have been all too unrea-
sonable in their demands for more eff
hcient operation and for demonstra-
ton of economies. This epitome of the
situation accounts for the slow, but
nevertheless gradual and constant cur
tailment of expenses. And as each step
is recorded in the process of complet-
ing betterments and installing cere-
monies, by just so much is the perman-
ent stability of net earnings assured.
This argument will be fair in good
times, but it will lose no force in bad
times. If commercial depression should
become lasting, the strength of the
railroad situation will be the more ap-
parent in the vast economies which will
then be aVailed of. because physical
condition is now so excellent that even
maintenance OUTLAWS are defera BILE
without serious detriment.-BroOklyn
Eagle.