Evening journal., 1916-09-30
RAILWAYS EARNED Sc PER CENT. IN 1910.

AMILLIONS Of Americans including many Delswar-
IV1 cans. have wholly impressions relative
10 the earning power Of railway properties under
isting conditions For the establishment of such per
call attention to the fact that in this the year
Of their largest earnings the railways Of the
United states earned net return on their property
investment of only SIS per cent The Railway Age
Gazette publishes analysts Of the returns TO the In
terstate Commerce Commission for the fiscal year
ended June 30 1916 This rate Of profit is com
pared with the 5000 per cent earned by the Ford Motor
Company ts capitalization
When the prosperity OF the railroads during the
fiscal year is stated in terms Of the return the
vestment" the Railway Age Gazette "the results
striking than those obtained by comparing the
gross and net earnings with those of previous
should be noted that while the earnings OF the roads
the largest their history the capital investment
which they must return they are to con
tnue to capital into the business also the
largest in their history"
The Interstate Commerce Commission has not yet re.
ported the property investment for 1916 but H.
conservstvey assumed it increased as fast in pro-
portion during the past year it did during the pre-
cedng four years Il amounted June 30. 1916.
10 $40 $50 per mile for the roads earning over 81 O0O
0O0 year and the operating income Of s4 400 per mile
earned during 1916 represents return OF only Sc per
this amount In 1907 the railways earned 5,sS
per Of total Of only S2,5S9 900,
1915 alone the propery investment according to the
Interstate Commerce Commissions reports increased
from s1SoSO 900 TO s17247 100000 over $4,000
100000.
While this was an amount than should have been
expended TO enable the roads TO keep pace with the
progress Of the country it at the rate OF about
s500b00000 a year A return OF Sc per cent. the
investment in the year OF the largest and net
earnings the railroads enjoyed exceedingly
modest especially when IL Is considered in connection
with the fact that II follows years in which the return
was very much less. In 1915 the rate OF return on
property investment only 4o4 per cent and in 1914
II was only 1874 per cent. while in 1918 it was
only 44ss'per cent
A rate Of Sc per cent is insignificant indeed when
compared with some Of the profits that being
during the present period OF prosperity by indus
trial companies. particularly in the automobile and
steel businesses The report of the Ford Motor
Company for the year showed net earnings Of nearly
s60OOo,O0o. 5000 per oent,.on a capitalization OF
100000 This company was able 70 nay a, dividend
Of 60 per cent and st retain surplus for the year
for reinvestment in the business Of s5sOOoOoo
Several other AUTOMOBILES companies have earned from
20 10 20 per their capitalizations, and the
head Of OF the large steel companies recently
quoted in the wall street Journal as saying that many
Of tho companies could dividends for the next
ten years Of their surplus after the present period
Of prosperity Is without earning another dollar.
Railroad investments are hardly TO be compared
with such these. but tho comparison indicates
the fooshness regarding the present earnings Of
the railways specially enormous the Gazette adds
Such facts and tgures may not be pleasant reading
10 political demagogues whose chief stock in trade Is
railing against public service corporations We feel
sure however that they will be enlightening TO minds
that have Influenced by such demagogues TO fol
low false thoughts and reach false conclusions rea
tive TO such corporations and their money-makng
power.