The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1908-10-07
The Panic Measured in Railway Traf-

some accuracy the effect on the rail-
road industry Of last years panic and
its consequent depression. The reports
for the first six months Of 1908 OF a
very large majority OF the roads are
before us, leaving only about one sixth
Of the mileage to be estimated. We
find that after ten years OF almost un-
interrupted increase in gross earn
ings. increases as enormous as they
were regular, the railroads Of the
billion dollars less in the first half of
1908 than in the corresponding half
of 1907. What this means is best
shown by comparison with the fig
| ures Of 1904, a year of sharp trade
depression. In the first half Of that
year the decrease from the earnings
Of the corresponding months Of 1902
was less than $20.O0O,0 900. So that the
year 1908. to July 1. finds the rail-
| roads reporting decreases twelve times
as large as the falling off in the only
other period in the last decade that
did not show increases This formid-
able evidence Of the depression we
have passed through is qualified, in
the opinion of some authorities, by the
very fact Of the great strides taken IN
earnings by the railroads in recent
years. They point out that we do not
h TO 60 1,on
1905,-to find gross earnings even less
than the decreased figures of 1908
Rut it must be remembered that the
| cost Of wages and material has in
| creased enormously sine 1905, and
that there have been huge new capital
| issues to provide facilities for an ex-
| pected further advance in traffic
These factors render a comparison of
gross earnings In 1908 with gross
earnings in 1905 very cherries. The
widespread character of the falling off
was as impressive as the large amounts
involved. Not single railroad Of any
size showed an increase in 1908 in
gross earnings. and only two showed
increase in net. The falling off in net
earnings was even larger than the de-
crease In growth, coming apparently
to more than 81 per cent. When it is
considered that these net earnings
must cover interest on a larger vol.
ume Of bonds than existed in 1907.
the extent Of the hurt to stockholders
can be understood.
But now half way on, in the latter six
months Of 1908, things are looking
better. Several months ago. in May
and June. the railroads showed some
indications Of success in handling the
problem Of reducing expenses to COR
respond with the smaller volume Of
traffic. In the face of continuing high
prices for steel and other material. and
of the impossibility Of reducing wages,
this was no easy task. But at the
height of the falling of in traffic,
which came in May. net earnings be-
gan to look little better proportion
ally. and this work Of decreasing ex-
penses has gone on progressively un-
til we find the Union Pacific in July
reporting an actual increase in net ir
the face Of the falling of Of nearly
100000 in gross, and the Southern
Pacific reporting practically the same
net earnings as in the corresponding
month Of last year. OF course, such
results can only be obtained on roads
that have been kept in the best ply
sical condition, and not on all of
these. Mr.. Hartman said, on his re-
turn to the East in mid-September.
that he had spent $3.50, 900, 900 in i'm.
proving the Southern and Union Pa
cific between 1900 and 1905, and it is
we'll known that correspondingly large
sums have gone into these properties
since 1905. But in spite OF the fine
showing relatively in net earnings Of
the most fortunate roads, and the bet
ter showing Of others. it is evidently
true that the drastic economies in
force must be at some expense to
| the physical condition Of our great
transportation lines and a scrutiny of
the sums currently expended on MAIN
tenance Of way and equipment, as re-
ported to the Interstate Commerce
| Commission, shows specifically that
the properties are not being kept
up'' as they were before gross earn-
ings fell off. SO that it is a much
more substantial cause Of congratula-
| ton that gross earnings themselves
are now slowly rising. The decrease
for July on the large body OF roads
| reporting was 1857 per cent as