The Manchester journal. [volume] (Manchester, Vt.) 1861-current, 1914-09-24
THE RAILROADS APPEAL TO
THE PRESIDENT OF THE
UNITED STATES

! Het N 1es aui iN"fi"as 1oAiphuat ht
Fairfax Harrison, President, Southern
Railway Company; Mr.. Hale Holden
President, Chicago, Burlington 4
Quincy Railroad Company; Mr.. Sam
uel Rea, President, The Pennsylvania
Railroad Company; Mr.. E. P. Ripley
President, Atchison, Topeka g. Santa
Fe Railway; Mr.. Trumbull, Chairman
Chesapeake & Ohio Railway and Mis-
souri,, Kansas g. Texas Railway Com,
panies; Mr.. Daniel Willard, President
Baltimore & Ohio Railroad Company
Mr.. Trumbull, on behalf of the com
mittee, presented the following mem.
orandum to the President
The purpose of this conference is to
lay before the President in brief terms
the present situation Of the railroads
of the United States--250,000 miles OF
great national highways. That the
case Of the railroads deserves sympa-
thetic treatment arises from the fact
that, although privately owned, their
property is devoted to public service.
The industrial health of the country
depends upon an adequate railroad
service; such service cannot be render
ed, and proper response to public
needs cannot be made, unless the f.
nancial soundness of the railroads is
maintained.
The credit of the railroads, seriously
impaired, as we believe, before the
war started, is now confronted by an
emergency of magnitude without
parallel in history. To understand the
full import of the existing crisis, it is
necessary to consider briefly the ante
cedent conditions.
The purpose is not to complain but
to point out the one paramount fact
that by reason Of legislation and reg
ulation by the Federal Government
and the forty-eight States, acting in
dependently of each other, as well as
through the action Of strong public
opinion, railroad expenses in recent
years have vastly increased. No crit
icism is here made Of the general
theory of governmental regulation,
but, on the other hand, no ingenuity
can relieve the carriers Of the burden
of expense created thereby. However
desirable may have been the expendi-
lures which have been forced upon
the railroads, no adequate provision
has been made to pay the bill.
This great increase in expense now
comedies with seriously depleted rev.
enues, with no corresponding ability
Of the railroads to reduce their costs
in proportion. Governments can pro-
ceed with expenditures of all kinds by
taxation, but railroads cannot. While
the effect Of the European war upon
railroad earnings may vary in differ
ent sections, it is plainly evident that
there will be serious decreases in the
total because of the unprecedented
difficulties in the marketing Of cotton,
the great decrease in imports, and the
general dislocation of trade and in
iustry.
Even prior to the existing emer-
gency and to meet the antecedent sit
lation, railroad expenditures general
ly had been reduced to absolute neces-
sites. The difficulty Of further CON
traction is enhanced by existing wage
agreements and, in so far as the West
srn railroads are concerned, by the
possibilities involved in the arbitration
to which they have re-
emily agreed
The net operating income Of the
railroads Of the United States for the
rear ending June 30, 1914, was $780,
100000 less than for the previous
rear, or about Is per cent. The gross
,arning for the year were S44 100000
ess than for 1913; expenses and tax
s were s76,O0O,000 more.
The maintenance Of the credit Of the
ailroads land the credit Of the rail-
oads establishes the standard for all +,
Industrial enterprises) depends upon
heir ability to increase their net earn
ngs. The railroads may have the ]
most perfectly appointed plants in the {
yorld, but if the net earnings are not I
dequate, new capital cannot be at T
racted. II
In the important Eastern rate case e
he Interstate Commerce Commission
found that the railroads v
j the richest section Of the country c
eeded more revenue. That finding i
'as based upon the situation prior a
, the first Of July, this year; indeed, S
pom conditions of year previous.
No emphasis need at this time be a
ut upon the new railroad capital n
hich has heretofore been required to t
rovide for normal development, but |
lis has been from S400,000,000 TO o
800, 100000 per annum, and railroads ii
lould not only be able TO keep h
breast Of the times, but should even 4
this emergency be in a position to