The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-04-07
Some Hard Railroad Facts.

some nara IkAlIrOa0 FActS.
There is tragedy in an array Of fig
ures which Mr. l.. +. LoREE includes in
his annual report as president Of the
Delaware and Hudson Company. Pre-
missing that Mr.. LoKEEs company In
representative OF the class Of railroads
which have been able to maintain n
margin between income and expenses
sufficient to protect its security holders
from apprehension for the immediate
| future. it Is all the more significant
that such II railroad should have such
II tale to tell as Is narrated in the sta
tistics referred to.
Economy seems to have been carried
by the Delaware and Hudson Company
to the limit Of efficiency. In the decade
from 1903 to 1913 It's average freight
train load increased from 1892 tons
to 55S77 tons, while the average car
load increased from 1924 tons to 1858
tons. Last year the company was able
to keep the ratio of operating expenses
from rising more than two-fifths Of l
per cent. above the level Of the previ-
Gus year. but Il glance backward over
several years shows even in its case
tendencies which have compelled the
railroads in the East to plead with the
Interstate Commerce Commission for
permission to advance their service
charges a trfie.
The orders issued in the process OF
tnt EnlArn1 hn, L.,
the last seven years added S1,525.919
TO the Delaware and Hudson's expenses
Of operation. Further additions can
be counted on. as Government regula-
ton is progressive process. Since
1909 the cost of materials and supplies
has increa sed GO per cent. on the
basis Of the prices which prevailed five
years ago. Through wage demands.
enforced by arbitration awards. dis
bursements to employees last year were
1870 per cent. greater than they would
have been on the 1910 wage scale. and
this calculation Omits from the reckon
ing the wage increases which became
effective after the middle of last year.
Between 1908 and 1913 taxes increased
16o per cent, and Of that increase 46.34
per cent. took place after 1910. he
tween 1910 and 1913 operating revenue
rose 2l.0G per cent. but operating ex-
penses went up $50 per cent.
Perhaps the railroad situation Is
more graphically illustrated in the case
of the Delaware and Hudson by consid-
ering the changes which have taken
place in the apportionment of every
dollar Of income In the last decade.
Whereas In 1903 273O cents out OF
every dollar went to pay wages and sal
aries. the portion required last year
was 1914 cents The increase in the
apportionment for materials and sup
plies was from 1868 cents to oo.3l
cents. The tax toll in 1903 was 1.59
cents out of every dollar and 2.27 cents
last year.
AS a result Of all OF the higher costs.
however caused, the balance of every
earned dollar available for the pay
ment of interest and dividends de-
creased from 51.75 cents in 1903 to
t''lo NNhts ldSt Ntui' AlIIoSI All OF
this decrease was accounted for by the
greater proportion of earnings needed
to pay wages, salaries and taxes and
meet bills for materials and supplies.
The tendency of railroad expenses to
approximate earnings tells heavily
against weaker railroads than the Del
aware and Hudson company. All that
efficient management can accomplish to
preserve a gap between income and
outgo is clearly not enough. There must
be an offset to the tendency or the rail
roads will reach stage where capital
cannot be had for their upkeep and i'm
provement because there will be no re-
turn for capital, The only remedy
about which there can be no doubt is
to introduce II factor Of expansion in
railroad earnings such as the increase
of freight rates for which the Eastern
carriers have asked