The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-12-18
RAILROAD SITUATION
CRITICAL, SAYS POOR'S
Pamphlet Shows Steady Decline
Of Earnings Due to
Legislation.
SEES NO RELIEF IN SIGHT

Poor's Railroad Manual Company has
issued a pamphlet which shows In strik-
ing manner how effectively railroad
credit has been curtailed within the last
few years and asks IL 1t shall be totally
destroyed. 1t says in part:
Tho railroads OF the United States
have reaohtd a critical point In their de-
velopment. Until recently they have
been able to provide adequate transporta-
ton facilities, Increasing with the growth
OF the country, because investors have
been wiling to purchase their securities:
but since the United States and the
states have begun to harass them by
hostile legislation to the point OF inter-
fering with their MANAGEMENT and ham
pering their usefulness the confidence of
investors IN American railroad securities,
not only in this country but Ia Europe.
mar been greatly weakened,
The Government has virtually as
sumed the management ~ the railroads
without mourning the risks Of owner
ship and apparently without int ligent
consideration or knowledge OF the busi-
ness. ana yet with an aggressive hostll-
ny 20 thei. successful operation. What
VIII become OF the railroads n they cam
not ind reli,f from these conditions Is an
alarming problem. Ia other Lines Of In
dustrN, when credit is endangered by
diminishing pron,s. relief may be found
by reducing operating expenses or in
prrastug prices. but the railroads can do
neither. for their rates are under Govern
mcnt control ana they are obliged to
maintain for the pubic service now AZ
the minimum VI its efficiency
Tables compiled 10y PuOrs Railroad
Manual Company show that during 1907
La. g .VNsFa n nj a
capitalization was ai2 per cent, and that
lu rose with the Elow;h OF the country
land EuUG railroad management 10 ga per
/ cent. lu 1909. In l9l2, however. the last
wear for which returns are available II
mad fallen below per cent. ana for tho
year Of 1914 IL probably not much more
/ than Az per cent since lsl@ net
earnings have declined about si0,0OO,OOO,
wnie railroad capital mas Increased in
the same period about slOO0,000,0OO.
/ \ totlc showing the Increase of taxa
Iton on railroad property indicates that
In 1912 the railroads paid 81 in taxes
out Of every Sll OF their net earniugA
and ia l9li 81 Out of every So OF nee
earnings Tn" rate OF taxation has
steadily increased In 1902 1t was So
per cent: TN 1872, ~ per cent. and in
tl9li about > per cent
in C.os!nE. the circular says that the
increase Il > per cent in freight rates
asked tor 10y Eastern railroads would IN
crease their net earnings by S4o OOO.OOo
annually that sucn Il small addition to
the earnings would not 30 far toward
restoring the credit OF the railroads. but
might help TO restore the confidence OK
the investors in American railroad Sc
.curities and that the complete restoration
of railroad credit seems hopeless unless
the Interstate Commerce Comm Ssion is do
pr.Nci OF Its rtt' making Junction
Two more important railroads we're
added TO the list yesterday # those that
have felt j, necessary to reduce div idends.
Toe Atlantic Coast Line reduced us semi-
Iuruusl declaration from 81. per cent 10
lea. par cent, puttu- the road on
instead Of z per cent. basis. The ! por
years
The Louisville and Nashville Railroad
.de,la.ed sem.-aunuh div!aend OF IN
per cent in place OF tho usual ga per
cent.