The Calumet news. [volume] (Calumet, Mich.) 1907-1938, 1910-09-21
THE RAILROAD SITUATION.
Said That Few Increases in Dividends
MAY Be Expected.

wage Increases Is now generaily iei''
the Increased expenses, coming with "A
lesscning OF business. are having a
very large influence on railroad earn
ings. This rs quite fully shown in the
results for July.
The Pennsylvania Railroad affords
"A good index of railroad earnings I'm
gaining anywhere from one million
to two millions a month I'm gross
earnings at the beginning OF 1910, Il
gained only S355.O0O in July More
over. it's transportation costs in
creased by s69OOOO in July. absorb
ing more than the grain in gross.
There was besides an increase Of
Se42 600 In maintenance expenses. The
higher wage scales and higher cost OF
materials are emecting maintenance
as wen as transportation, though 10
lesser extent.
Now York Central shows a similar
situation with gain OF $4,000 i'm
gross and an increase in transporta-
tion of $3.50 With larger main
tenance expenses as well. there is
heavy decrease I'm net earnings. just
as i'm the case Of the Pennsylvania.
In the West the Chicago 4 North
western is standard. ON this sys-
TEN the July gain in gross was $780,
600. and the increase in transporta-
ton expenses $503,O00. Only a de-
crease in maintenance kept the net
earnings from showing a decline.
st. Paul makes a similar showing.
So do Union Pacific, southern Pacific
Colorado & Southern, Missouri, Kan
sas q Texas. St Louis & Frisco, and
Denver & Rio Grande.
when with increased expenses there
Is also a decrease in gross earnings,
the resulting loss in net is of proper
lions not witnessed since the months
Just following the panic of 1907. Yet
this is just the case in July with four
,oads representing four distinct sec
tons of the country. viz: Northern
Pacific, Rock Island. Lackawanna, and
Bangor q AroOstook.
A few roads i'm the East are still
breaking even" with n year ago. Bal
timore & Ohio. Chesapeake & Ohio.
ana Norfolk & Western show only
very slight decrease in net for July.
These three systems were still getting
the benefit of a good gain i'm gross
The Southern roads, except the Louis
willie a. Nashville. are doing exception
ally well. The Erie is also getting
exceptional results. The Atchison in
July stopped a long succession OF
monthly decreases in net, but this
system can fall back on retrenchment
in maintenance expence. which was
very large last year in connection
with charge offs for old property re-
placed In connection with capital out
lay for new construction.
Boston & Maine for July showed
a decline i'm freight revenue, and but
for it's summer passenger traffic in
crease would have had even a large
decrease i'm net earnings than the ma
terial decrease reported.
In view of the fact that the monthly
increases in gross have got down TO
small proportions and more even dis
appearing, TO be replaced by actual
decreases In some instances, the
heavier expenses are all the more diff
ficult To carry. The increased expense
Is clearly i'm transportation, which Is
made up so largely Of wages, and
over transportation costs the manage
ments have very little immediate con-
troll. In maintenance, retrenchment
may be made, but less expense here
means more than whatever actual re-
duction in dollars is made, for dollar
of maintenance is not as much as 1t
was a year ago. the wage cost enter
ing here as well as in transportation
though not 20 the same extent.
over and above the losses by higher
expenses, the railroad companies have
larger charges 90 pay out of net earn
ings. Interest on tho new capital is
sued during the past twelve months
has 20 be met This Is burden that
does not appear i'm the monthly state
ments, but IT figures in the income ac-
count
II Is, therefore. obvious that few
dividend increases can be forthcom-
ing There may be one or two such
IN the Lehigh Valley and the Colorado
q Southern, for instance. which have
been giving their shareholders only
small part Of the share earnings. But
the companies in general must simply
await what the fall months viii bring
forth In the way of traffic. and what
the Interstate Commerce Commission
is going 20 do In regard To increased
rates. which were postponed by agree
ment until November /.
II will be interesting and possibly
and Indication of the actual outcome
of the hearing. TO note whether the
Commission. as a strictly impartial
Investigating body. takes the same
attitude toward those representing
the shippers and the public. that II
has already taken toward the railroad
officials giving their side OF the case
at the hearing-Hayden Stone a co.