The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1914-04-13

| ing the fiye-year period ending with
1908. and In 1918 1t was greater than
In either one OF those fye-year
periods.
IL has been claimed that the inter-
est charges have increased, leaving
not so large return on capital STOCK
after interest paymentse have Deen
made. Here again we find. using the
fve.year groups adopted by the car
riers, that the average per cent OF
the net corporate income TO capitai
stock outstanding for all systems In
the eastern district was slightly low
er during the 190S-12 period than DUR
ing the l903.7 period, and II Is one
hundredth of one per cent lower In
1913 than In the first period named.
IL we pursue the same method as
lust outlined and include the year
1918, the situation Is again complete
jly reversed. The average per cent
| of net corporate income to capital
stock outstanding, after the payment
OF all operating expenses, all taxes,
all interest on funded debt and all
other expenditures of all kinds and
characters, the railroads in the east
ern' district had net, during the five
year period 1904-7. 7.S9 per cent on
their capital stock; for the l9O9-l3
period IL was SOC per cent, and for
1913 it was S.07 per cent.
The rate Of return on capital stock
outstanding was greater In the latter
five-year period than in the former;
and the rate Of return in 1918 Was
greater than the average for either
one of the said periods. The in
crease in net corporate income has
been at greater rate than the In
crease in capital stock outstanding:
and there has been greater increase
in net corporate income plus interest
than in total capital obligations.
These figures which l have just
quoted are entirely independent Of
any changes or deductions because
of maintenance expenditures. They
are taken from the exhibits OF the
carriers offered in evidence without
alterations or change, except to In
clude the year 1918, as given by them
in the fve-year groups.
During every winter revenues fall
off. This is the normal condition.
During the past year the Pennsyl-
vania, Baltimore & Ohio, and other
lines, have been compelled to spend
several millions because OF the Hood,
which was the largest In the history
|of these railroads. The Pennsyl-
vania alone expended over 100000
during the calendar year 1913. The
New York Central has just completed
its depot In New York city at q cost
lof many millions. These unusual
factors have decreased net revenues
considerably.
1t is always unjust to take as q
test the conditions during q short
period of time. Every time there Ii
la decrease In revenues, II You increase
your rates, then you should decrease
lyOur rates every time your revenues
increase. Ii Is poor rule that does
not work both ways. 49,
The average revenue per ton haul
one mile Is as great today as 1t was
10 years ago. and during that period
the net revenues Of our railroads have
increased more than $400, ZOO. 900.
That method or putting rates up
and down as revenues increase and
decrease from month to month would
result i'm unbearable confusion and
hardship.
The railroads adjust their mainte-
nance allowance from year to year
practically as the policy OF the CON-
pany may dictate. For instance. on
the 1O-year-consolidated statement Of
the railroads covering all the com.
panies operating In this district every
year In which their gross revenues
went up or down. their maintenance
allowance went up or down in the
same manner. The first time that
rule has ever been violated has been
during the past seven months. While
their gross revenues declined $4,000
900, their maintenance allowance were
increased more than $17,000,000.
II their maintenance allowances
during this seven-month period had
been on the same basis as they made
them in the year 1912, there would
have been q decline In net revenues OF
nine per cent. Ia 1908 there was a
decline In revenue OF IL per cent. No
crisis followed, and the following two