New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-02-05

the CITY of Paris 6s loss OF 31s
points and the United Kingdom 5l2s
of 1921 a net decline of l point
Home bonds held much better than
the foreign issues.
Manv things are likely to happen
in this troubled little world OF ours
which the mind of man cannot fore
sec. But whatever happens the rail-
roads are certain to get the worst
Of it." in the opinion of many writers
of market letters in Wall Street,
who endeavor to keep the public en-
l;ghtened as to the securities IN
which they think the investors
money should be placed. In view OF
the remarkable increase IN gross
earnings from month TO month IN
the last two years the unsuspectlng
investor may have come TO look with
favor on railroad securities. He
may, in fact, have convinced HIM
, self that it might be desirable to
have such securities in his posses
sion, arguing that in the years to
come. war or no war, the business
of hauling freight in this country
must necessarily keep pace with
natural growth Of population ana
the development of the nations
many resources. But on his way TO
give A broker an order TO buy such
stocks as his fancy might have Sc
lected as a good investment he meets
friend from Wall Street who is
ON the INSIDE" of all that transpires
1 in thought or action within the mys-
FERROUS realm Of finance.
The friend may be in hurry to
keep an appointment with a big
banker" but generously gives ear to
the questions asked by the intending
BUYER of railroad stocks. Time,
however, is too precious to discuss
these points in detail, so the wall
Street man" draws from his pocket
4 market letter issued by a Stock
Exchange firm and tells the inno-
cent investor to read and under
stand. Perusal of this informative
cnistle discloses some rather start
ling facts. The reader learns that
The railroads cannot, with their
present terminals, equipment and
labor force, haul and deliver more
goods. They have reached their
maximum capacity. AS their costs OF
operation began TO rise rapidly last
fall, it is probable that their maxi
mum net earnings were reached last
October or November.
Also that the railroads are eX-
pending 40 cents out of every dollar
they earn for labor and that sit is
evident that an average increase OF
80 per cent in wages means de-
crease of II to Is per cent in the
operating income of the railroads"
Furthermore, some of the railroads
are paying from 80 to 200 per cent
more for steam coal on new con-
tracts, while the prices paid for
rails, cars and locomotives are from
80 to 80 per cent higher than ever
paid before. Because of their
rather-when not very-poor credit
the railroads are capita!izing these
dearly bought articles at high rates
Of interest"
Then, with all these handicaps,
the railroads are confronted with
new but lusty competitor, for
The automobile officials now tell us
that the 3,25O,O00 registered automo-
biles of this country travel an aver
age Of 5000 miles each a year and
carry an average Of three psssen-
gers. They therefore make an aver
age Of 4s,750,OoO, 900 passenger miles.
which is 2OO,OO0,OOO more than the
railroads make. Besides, the motor
trucks are supposed to do $7b,Ooo,-
600 OF business in a year, which is
more than one-fourth Of that done by
the freight carrying railroads. The
autos and motor trucks are each year
/ cutting a bigger hole in railroad
earnings.
And, finally
As considerable part Of the rap
idly increasing cost OF living for
railroads is due 70 gold depreciation.
( and 81 this cause will almost surely
/ continue 20 operate for many years
! 20 come. the case of the railroads is
almost hopeless unless higher and
| higher freight rates are permitted.
! But because Of their present rec.