Imperial Valley press., 1916-09-26
PROBLEMS WHICH
TODAY FACE
RAILROADS

ard others in such financial condition
that less than thousand miles of
rev line were constructed in year in
the whole United States, the following
editorial from the San Francisco
chronicle is an enlghtening discussion
on the problem which today faces the
railroads.
Zone of the most serious problems
row confronting the American people
is that of assuring the prompt move
ment of railroad traffic when our pop
lulation is twice what it is now, and
during the years when the increase is
taking place. For many years to come
and perhaps forever, huge sums will.
be required each year for new lines,
double, triple or quadruple tracks, ter
niinal facilities, costly stations to sat
isfy local pride, but which do not in
crease earning power; improvement of
alignment and grades; often involving
costly tunneling; new equipment, in ad-
dition to mere replacement, electrifi-
cation of important lines, and what
ever else we know or which human in
genuity may uncover or invent, and
which is properly charged to capital
account. When we think of all these
III gent requirements, the late Mr.. Hills
estimate of billion year seems very
moderate.
"The question is, where is the mon
ey to come from? Those who talk
most and think least blithely say
There must be Government owner
ship. As that would involve exclu-
sion of all railroad property from
state and local taxation, a new ma
tional Indebtedness of from fifteen to
eighteen billion dollars at rates of
interest greater than the strongest
systems have hitherto paid, and cer-
tsinty that under government owner
ship, the service would be poorer than
we now get and its cost greater, that
proposition need not be considered
What is now to be considered is the
probability of the money being sup
piled by private investors.
when dealing nationally with the
subject, one mcst write in terms includ-
irg all the railroads, while the fact is
that some railroads are very profitable
end some are operated at loss. Some
have still sufficient equity represented
/ by stock ownership to enable them to
borrow at current rates, while others
cannot borrow at all.
! "It may be conceded at once that if
the railroads could be assured of the
net income which they are now get
ting, there would be little trouble in
selling shares as we'll as bonds, even
if, without raising rates, wages af all
employees were largely increased.
But there is no such assurance.
And the large profits now made by the
tent distributed in increased dividends,
but are necessarily used to make bet
terments and provide the equipment
whose necessity was foreseen, but for
which the money could not be got dur
ing the years Immediately preceding,
when approximately third of the rail-
read mileage of the country went un-
der receiverships, from which perhaps
90 per cent of the total mileage has
rot yet emerged.
The facts are substantially as fol-
lows, according to the figures COM
piled by the Interstate Commerce Com
mission: From 1907 to 1914, the ac-
t, al new cash invested in American
railroads was 1852, ,283, $50. In 1914
the actual net income available for in
terest and dividends was S74,110,851,
less than in 1907. If it be said that
business was remarkably good in 1907,
and remarkably poor in 1914, and that
years constantly vary, it may also be
said that in but two years between
1907 and the beginning of war, pros
perity did the increase of % per cent
in the capital of the railroads, bring
any additional net revesue whatever,
and in those years it was trifling."