The chronicle=news., 1914-09-19

lrious 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 industry.
| Even prior to the existing emer-
gency and to meet the antecedent
situation. railroad expenditures gen.
orally had been reduced 70 absolute
necessities. The difficulty or fur
ther contraction is enhanced by ex-
isting wage agreements and, In 30
far as the western railroads are con-
cerned. by the possibilities involved
In the arbitration proceedings to
which they have recently agreed.
The net operating income OF the
railroads OF the United States for the
year ending June 30. 1914. Was
S12O. 100000 less than for the prev
ious year. or about Is per cent. The
gross earnings for the year were $44.-
900, 900 less than or 1913: expenses
and taxes were $4,000, 900 more.
The maintenance of the credit of
the railroads tand the credit Of the
railroads establishes the standard for
all Industrial -enterprises) depends
upon their ability to increase their
ret earnings. The railroads may
have the most perfectly appointed
plants in the world. but II the net
earnings are not adequate. new capi-
tai can not be attracted.
In the important eastern rate case
he interstate commerce commission
Unanimously found that the railroads
In the richest section OF the country
needed more revenue. That finding
WAS based upon the situation prior to
the first OF July this year: indeed,
upon conditions of year previous
No emphasis need at this time be
put upon the new railroad capital
which has heretofore been required
to provide for normal development,
but this has been from $500. 900. .OOe
to 5000 100000 per annum and rail-
roads should not only be able to keep
abreast of the time, but snohld even
in this emergency be In position
to anticipate the demands of an ex-
panding commerce.
Simultaneously with the great I'M
pairment OF earnings, general credit
conditions have broken down, and
the absolute and immediate necessi-
ties of both public and private bor-
rowers OF money here and abroad
have already increased interest rates
to level unthought of few months
ago-rates much higher than present
net earnings return upon the rail-
road property Of the United States.
This emergency was not contem-
plated when the interstate commerce
commission rendered its decision in
the eastern rate case. yet the prob
lens now confronting the railroads
greatly transcend In seriousness
those which existed then. The men,
ace is now not only to railroad
credit but to the transportation serv-
ice itself. and efficient transportation
is inseparably connected with the
welfare of our people.
Securities OF United States rail-
roads held abroad are computed at
from three to five billion dollars. 1t
is certainty that bond and note OBJ
legations of the railroads maturing
before the end of next year aggregate
over $52O,OOO.G .GGO. In the highest
public interest 1t Is imperative that
these obligations shall be met. Yet
1t is evideI> that for long time
Europe will not be a lender of money
to America. On the contrary. the
war will create such enormous debts
and involve such general disloca-
tion of industry and commerce, that
Europe must realize largely on it's
holdings of American securities re-
gardless of the price obtainable.
The New York stock exchange has
now been closed for a longer period
than at any other time in it's history
There is no present market for rail-
road securities. either old or new
The United States is in a condition
of financial isolation. II the stock
exchange were to open tand 1t must
open some time). the pressure of SELL
ing would inevitably be greatest
against railroad securities. If they
go down, industrial issues will fall
still more seriously. The public ne
cessity to stem this tide of selling
and to reduce to the utmost its de-
structive effect, calls for the exer-
else of every resource of statesman
ship.
Our respectful requests are:
l.. That the president will call the
attention of the country to the press
ing necessity for the support of rail-
road credit by the cooperative and
sympathetic effort of the public and
of all governmental authorities, and
suggest that the railroads be relieved
as far as possible of further imme-
diate burdens involving additional
expense: and
9. That the president will urge
practical recognition Of the fact that
an emergency has arisen which re-
quires, in the public interest, that
the railroads have additional reve-
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