Manchester Democrat. [volume] (Manchester, Iowa) 1875-1930, 1915-01-06
What the Railroads
Do With Their Income
Why They are Considered the Great
Business Barometer of the Nation: II

expenses, the interest on their
tunaed uebt and ulyldenus ON their
STOCK, winch averaged only 4.2o per
cent, the railroads. nau leAt III 1919
a ualance OF $Io5, 1Uo,o47 with aWnlch
10 MAKE improvements anu 10 use
as q surplus funQ Ior emergencies OIL
one klnu anu another. Ill OLnef
words, after the ralroaus got through
paying for their laDor, steel, coal,
lumber, interest, ulvldenuS and otner
necessary expenses the above $lS5,-
W., 100 was all the surplus they mao
lett tor themselves out OF IN income
OF more than three billion dollars
and this, too, upon properties worth
the gigantic sum or twenty billion
dollars. furthermore, the lions share
OF TINS surplus was earned ny the
stronger roads while such splendid
put weaker lines as the WABASH
didn't earn enough to pay interest
on is receivers certificates. Thus
IT. can be seen that on the basis
Of the present rates the railroads pay
back TO the public In one way and
another almost every dollar they re-
celve for the services they render
to the people. l~y+ ...@
BURNING CANDLE At BOTH ENDS
AS a matter, OF fact, it every rail-
ROAD in the country had charged off
a proper percentage for depreciation,
instead OF having had a surplus OF
1888, 100000 left in 1913 they would
nave had an actual deficit running
into the millions. Some of the larger
systems have a fixed yearly depre-
citation charge-but scores OF the
weaker lines,ln their frantic endeavor
to pay the interest 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 poblic i'm
possible. In q recent article, James
j. Hill, the great Empire Builder
OF the North points out that Amer
lean railroads should spend at least
$500, 900 annually in improve
ments and betterments-and it is
tn; refore no exageration Ito say that
rapidly deteriorating equipment is
one of the ghosts which haunts
hundreds Of railroad. managers
throughout the country at the pres
ent hour. =
As was stated in last weeks article
the operating income of the rail-
roads for the fiscal year ending June
80, 1914, was $11S.554,s75 less than
for 1913, while expenses and taxes
were $40 ,535,653 greater. It can
therefore be seen at a glance that
unless the railroads are given some
increase in rates in the very near fu-
ture the time when many of them
will go upon the rocks Of financial
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 1t had gone into effect. In a
more fully discussed.
a BAROMETER OF. PROSPERITY.
II 1t is an old saying that when the
railroads are pros perous everybody is
and the manner in which
their income is disbursed, as above
explained, tells the reason why. In
short, for years they have been re-
CARED as the great business baro-
meter of the Nation. No other In
dustry in the country employs so
many men as do the railroads, and,
furthermore, it is high grade of
labor employed upon as lucrative a
basis as obtains in any other larg in
dustry. 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 y the
farm cannot help but have a ire
mendous effect upon the commerce
and agriculture 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 hun
dreds of thousands Of men who work
in the great steel mills, the coal
mines, the lumber industry and in !
the big car and locomotive shops are !
equally vitality affected, for when
the railroads are making extensive
and buying heavily of