The Washington herald., 1914-10-26
Bleeding the Railroads.

Gross earnings 100000
Net earnings en- Iio0OSO0o
These figures, compiled by the Financial Chronicle,
tell the story, perhaps more graphically than any
other record submitted, of the American railroads
for the year of grace, 1914 They are derived from
the monthly returns which steam railroads are re-
quired to file with the Interstate Commerce Com
mission. They embrace every railway whose gross
earnings exceed $4,000 per year. The law exempts
the small lines earning less than that and they
may be dismissed as negligible and unimportant
quantity.
Gross earnings for 1914 were $3oSo.oSI.632 COM
pared with S3,Ioo46I,3o4 for 1913 decline OF $7o
47e672.
Expenses for 1914 were $2,22s,I44233, which
represented an advance of SsI,434374, from the
figures of 1913, which were $2Io37ooSso.
Loss in net earnings may be calculated from the
above figures. In 1913 they were $o6675I445, and
for 1914 they made the enormous decline of SIIo-
oI4o46 to total of $S5SS37,3oo, or II47 per cent
In comment upon the figures, the Chronicle says
"At the moment the totals thus arrived at by US
serve an important purpose in rejecting the un-
fortunate condition to which the railroads of the
United States are being reduced as result Of causes
beyond the control of the managers. The chief in
huences of the year unfavorable Trade was
depressed and last seasons agricultural yield in the
West particularly IN the grain section, was deficient.
Accordingly gross earnings which IN a normal state
of things would have increased, now show falling
off Before enumerating the amount of the loss we
want to direct attention to the comprehensive nature
of the exhibit and the magnitude of the totals. The
total of the gross earnings for both years exceeds
S5ooooooooo and the net earnings for at least one
Of the years runs close to SI,ooooooooo while the
aggregate length of road represented for the latest
year is over 246ooo miles
Stated in brief, the late years gross earnings
fell short of those of the year preceding in the
of $7o47q672 This in itself would be bad enough
but in addition the roads have been unable to curta
their expenditures so to offset in part the loss in
gross. On the contrary, expenses actually increased
notwithstanding the utmost efforts at economy. In
other words expenses added to in amount of
S3I,434374 concurrenty with the loss of S7o47o672
in gross. As consequence, net earnings were re-
duced in the prodigious sum of SIIooI4o46.
Nor does this tell the whole story of the rise
in expenses. The net earnings as here given are
before the deduction of taxes These taxes them
attempted compute the taxes ourselves for the
latest fiscal year, but notice that the Bureau of
Railway Economics at Washington in its summary
for June reports that taxes in the fiscal year 1914
increased S53 per mile in the case of railroads hav-
ing annual operating revenues above 100000 Ap-
plying this S53 per mile to the 246Is7 miles of road
represented in compilation It is found that the
1914 taxes exceeded those tor 1913 by over $4,000
600. Taking the increase in taxes into account,
therefore the shrnkage in net earnings, now found
to be, roughly SIIIoooooo is raised to SI24oooooo
1t should be remembered too, that the stock and
debt of United States railroads necessarily in
creased from year to year by capital expendi-
tures made necessary in order to maintain the
efficiency and increase the capacity of the roads, and
these new capital expenditures in turn add to interest
and dividend requirements. Thus the situation is
that while larger net earnings were imperauvely
needed. they have instead been reduced in the
of SI24oooooo in a single year. And yet the rail-
roads are denied relief Notwithstanding that they
are humble suppliants before the Interstate Com
merce Commission. Is it not high time that tins
was changed with a view to averting universal
disaster"
The complete compilation showing the disastrous
results of the year by geographical groups is as
follows: