The Washington times., 1916-02-23
Actual RailwayProfits
In Year $2OO,OOO,O 1000.
That Much Available for Dividends if Proper Debt
Charges Were Made-Corporate Lines Dis
regarded and Lines Considered as
One System.
BY GLEN B. wINsHIp.

NEW YORK, Feb. 23.-conld tho rail-
roads pay higher wages to 5000 or
more engineers, firemen, conductors and
trainmen and still give the public the
quantity and quality OF service which
the public has a right To demand7
There IL much difference OF opinion on.
this question. as there has beor on the
true average wage OF railroad en-
ployes.
In two preceding articles facts were
given which showed what the men arc
receiving. but whntever may be the
decision of the public as to whether
their wages should be increased. Il n
vitality important to know whether
higher wages cold be paid. and II so.
whether 100.0000o0 Americans will bo
taxed for the benefit OF $4,000.
Ways Of Viewing Question.
There are varlous ways OF viewing
this question OF the railroads ability
to pay. The man whose sympathies
are with the roads might point out
that In 1914. the latest year for which
complete statistics are available, net
income Of American railways. as re
ported by the Interstate Commerce
Commission. amounted TO only s2s;, ;,Tla,-
S6 after the payment of fixed charges,
or approximately l-3 per cent on out
standing capital stock. This, however,
would not be the whole truth"
The man whose sympathies are with
the workmen as opposed to those of the
roads might point to large dividends
being paid by certain companies; he
could revive old scandals about large
sums of money diverted from their
proper channels: he could cite roads
which have been ''watered;" and he
could bring forth evidence that net
earnings OF the great majority Of inn
portant railroad companies have been
increasing rapidly for months. But
these things would be misleading.
Service the Chief Concern.
To certain extent. naturally. the pub
lie is interested in these various con-
tentions. but its chief concern In the
service which It must receive from the
transportation system.
To say that the Delaware, Lackawan-
ma and Western could pay much larger
wages to It's men and still distribute
liberal dividends to Its stockholders.
or that IL the Erie In forced to pay more
to its men the hopes of It's stockhold-
ers will be blasted-to cite such argu-
ments is to avoid the real issue.
The status OF the railroad industry
from the point OF view OF the public
may. be appreciated II you forget cor
porate divisions and consider the rail-
ways as one great system.
The Interstate Commerce Commission
has attempted to- do this in certain Of
It's statements.
Total Railway Capital
Total railway capital on June 30. 1914.
was reported by the commission as
t2o.247. .3J1.257 Part of this capital was
owned by the railway corporations
themselves. After taking this fact and
othcrS into account. the commission re-
ported the net amount not held by rail-
ways as SIS. us, ,6y6. .a2o.
Accepting this, for the moment, as
the actual net capitalization after
elimination Of all publications. suppose
we consider the railways as one great
system with total outstanding capital
obligations OF s15.7is. SOS .925. OF which
funded debt made up 50. 70S. 20, ,002. and
stock $6,Oll. .4W.SI3.
Regardless Of when. how or why those
bonds and that stock were issued. they
are outstanding obligations and must
be reckoned with. The owners of our
system, then, have stock aggregettnB
about six billion dollars. They have
borrowed about nine billion seven hum
Gross operating revenue Of this sys-
TEN amounts to more than 5000. 900 900.
In 1914, a poor year. IL exceeded that
amount by about S47, 900 900, and in 1918,
a good year, by about Sl25,ooo 90.
Where the Money Goes.
The first big slice taken out Of that
revenue Is for pay roll. In 1914 that
amounted to more than 81. $50 900 900. or
more than IS per cent Next comes
other operative and maintenance costs.
chiefly materials, bringing ordinary
operating expenses up to more than
81. 900 000, 900. This item was about $780,
900 900 greater In 1914 than In 1913 costs
OF many kinds having increased.
Various auxiliary operations. such as
railway restaurants. etc, resulted In a
net loss of almost 81 ,500. 900. leaving in
1914 net operating revenue of a little
more than $S45. 900 900, and in 1915 a net
OF about $957, ,000.0 900.
Next come taxes. which have been in
creasing pretty steadily for years. In
1918 they aggregated S127. .33l 800. and in
1914 they jumped to S140,53i. .5I5. All these
tgures. of course. are taken from state
ments of the Interstate Commerce Com
mission.
20 We find after all operating costs
and taxes were paid the balance was