The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1914-12-12
What The Railroads
Do With Their Income
Why They Are Considered the Great
Business Barometer of the
Nation

item the reader can grasp what rail-
road prosperity means to the great
steel mills, the lumber and coal indus
try, the big car and locomotive build
ing concerns, and other sources of
railroad supplies. In taxes they paid
out the enormous sum of $129,O52.922,
which helped to maintain the public
schools. public highways and other
revenue expenses of every state, coun-
ty and incorporated town and city in
the country. After the interest had
been paid on their funded debt ard
all other characters OF expense had
been met, they had $15s.426,676 left
out of which to declare dividends
and to use as a surplus fund for emer-
gencies of one kind and another.
In other words, after the railroads
got through paying for their labor,
steel, lumber, coal, interest and other
necessary expenses, the above little
more than $153,OO0,0OO was all the
surplus they had left for themselves
out Of an income Of more than three
billion dollars-and this, two, upon
properties worth the gigantic sum of
twenty billion dollars, or less than l
per cent on the total investment.
Thus it can be seen that on the basis
of the present rates the railroads pay
back to the public in one way or an
ceive for service.
Burning Candle at Both Ends.
Ae, 80 Go nj I
road in the country had charged off
a proper percentage for depreciation.
instead of having had a surplus of
$3.50. OO0, 900 left in 1913 they would have
had an actual deficit running into the
millions. Some of the larger systems
have a fixed yearly depreciation charge
but scores of the weaker lines, in
their frantic endeavor to pay the inter-
est on their debts and maintain the
standing of their securities. use every
dollar of their income to this end. and
hence one of the most alarming phases
of the present railroad situation is that
this process of burning the candle at
both ends means a deterioration of
rolling stock and roadbeds which will
render the continuance of adequate and
safe service for the public impossible.
In recent article, James. ]. Hill. the
great Empire Builder Of the North"
should spend at least $1,000. 00O, 600 an
nually in improvements and better
merts-and it is therefore no exaggera-
ton to say that rapidly deteriorating
equipment is one of the ghosts which
haunts hundreds Of railroad managers
throughout the country at the present
hour.
AS we stated in last weeks article,
the operating income of the railroads
for the fiscal year ending June 80, 1914.
was $120, OOO, 900 less than for 1913. while
expenses and taxes were $76.000,OOO
greater. 1t can therefore be seen at
glance that unless the railroads are
given some increase in rates in the very
near future the time when many OF
them will go upon the rocks of finan-
cial ruin is not far off-and yet the
slight increase necessary to save them
is so small that the average citizen
would not be conscious of it after it had
gone into effect. In future article
cussed.
A Barometer OF Prosperity.
1t is an old saying that when the
railroads are prosperous everybody is
prosperous, and the manner in which
their income is disbursed. as above ex-
planned, tells the reason why. In short,
for years they have been regarded as
the great business barometer of the ma
ton. No other industry in the country
employs so many men as do the rail-
roads, and, furthermore, it is a high
grade of labor employed upon as lucra-
tive basis as obtains in any other
large industry. When times are good
nearly two million people, first and
last, are employed by the railroads,
and when this vast army is working
full time and is cOntented the millions
they pay out for merchandise and for
the living necessities produced on the
farm cannot help but have a tremen-
dOuS effect upon the commerce and ag-
riculture of the country.
But this is only half the story. Aside
from the nearly two million operatives
directly employed by the railroads in
normal times. the hundreds OF thou
sands of men who work in the great
steel mills the coal mines, the lumber
industry and in the big car and loco
motive shops are equally vitality affect
ed, for when the railroads are making
extensive improvements, and buying
heavily of these supplies it means that
these great industries are running full
shift, while wnen the railroads are sub
sisting only upon the absolute necessi-
ties it means that many of them are
only working half shift.
Farmer vitality Concerned.
That the farmer has a very vital and
personal interest in this situation
should be apparent at glance. When
the millions of laboring men in the
United States are profitably employed
and when all our great industrial en-
terprises are running full shift it
means that he will have a larger de-
mand and receive a higher price for the