The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-04-05
NY. CENTRAL HEAD
FOR SURPLUS FUND
Advocates Reserve for Rail
roads Such as Is Now Re-
CURED of Banks.
INCOME LOSS DISCUSSED

A. H. Smith, president OF tho New
York Central Railroad Company. has Is
sued a statement In which he discusses
the heavy falling of IN the gross earn
ings OF the company. az shown In tho
last annual report. together with the In
crease of about 100000 in interest
charges.
at Ia probably not generally realized"
MIR. Smith says, that the New York
Central system for the past year has mad
an average OF about 100000 worth
OF cars and $4,000 900 worth OF loco
motives Idle. which condition obtains At
the present time. This means that We
row have In tho neighborhood OF $4,000
Idle cars. almost entirely iron ore. coal.
coke and fiat cars. which arc bringing
no return Of revenue to us ana upon
which we are carrying tho interest
charges. This Is condition which 10
common to all railroads In this terri
tory.
Conditions In the paSt made II neceS-
eary for US to provide this large amount
of rolling stock in order TO handle tho
business offered and give proper service.
Before the business depression every
available car was taxed 10 it's utmost IN
meeting tho demands OF shippers ana
there was car shortage. Similar con-
ditlons obtain as regard other railroad
facilities, shops. tools. tracks. yards. en-
sne houses. freight and passenger sta
tons.
"Briefiy, railroads are called upon in
times Of prosperity to meet the maxi
mum demand OF tho high tide OF bus'-
ness and when tho tide goes out they are
} left with the Investment unsupported
10 meet this condition railroad COM
parrtes should be permitted TO acoumu-
/ late reserve fund or surplus Other
public Institutions such as BANKS, trust
| companies insurance companies, 10, are
permitted and oven required to accu-
mulate such reserves ard surplus against
the exigenc!es OF times such as these.
Demand for Facilities.
The return Of prosperity will quickly
demand these facilit!es, ana the coun'
/ try cannot 30 along without having
them available.
Tho increase IN rates granted 70 the
Eastern railroads OF per cent. on
a portion Of their traffic 10 helpful to the
extent OF the increase II does not
solved the problem OF increased carry.
ing charges above recitcd increases In
wages, taxes &c, and OF tho necessity for
safe and adequate reserves. But as the
problem becomes better known to tho
authorities and the public feel hopeful
that they will meet II in easonaole
and helpful spirit"
With regard TO the exhibit by the
Lake Shore and Michigan Southern
Railway for the last fiscal period Mt
Smith says that the loss IN revenue WAS
mostly IN a class Of freight which yields
carload shipments, such as coal. ore and
iron, and moves IN heavier trains. The
percentage OF loss IN gross was about
double that Q. tnc Central, so that the
proportion OF facili les and equipment
TO the curta,'ed volume OF business made
difficult situation 10 meet.
Improvement work In progress was
stopped wherever precedent" Mr.. Smith
saws, (which made Il feasible TO curta'I
expenses without !mpair!ng tho standard
OF the property. or the decrease IL
investment income OF about s2,ss0,0oc
$4,000 was duo TO decreased use OF
equipment in interchange on account OF
the decline In business and s2,20o,00o
IN decreased return from affiliated COM
panies by reason OF the effect upon
them OF tho bad times. TIE small In
crease IN deductions from income wac
due 20 the improvements OF the previous
year. which Increased the capital invest.
ment
External Causes RespOnsible.
Therefore he falling OF IN net IN
como for the past nscal year OF APP
prox!nately S5.36o,000 Is thus largely
duo 20 external causes and the Shrink
age OF business. Perhaps the deoreas,
IN bushes. done by the Lake Shore and
Michigan Southern may bring home 70
our minds the relative Industrial and
commerc,sl conditions existing In the
region served by the Lake Shore In the