The Washington herald., 1917-03-06
s1,o5S.S26.94O 81

enable them to meet the higher living costs; and
is Taving extraordinary increases in the prices OF
materials and supplies. and in taxes: in addition to
which II is burdened with conflicting and wasteful
regulation and laws. These increased costs have
made heavy inroads into your profits during the
past few months and II Is expected that their effect
will be even more acute in 1917. With such q
widespread and TressinE demand for larger termi-
ra''. greater fsCilities and more equipment il is
ESSENTIAL nf th"v 10 be provided to grant the
ralrtacS the higher rates necessary 10 place them
IN position to meet such rising COSTS and give
them the earning hesis 10 attract capital for
the additional transportation facilities and service
so urgently required. The lack Of sufficient surplus
for many years past has prevented the railroads
from providing such additions aud betterments in
advance Of traffic demands. and while labor and
material costs were reasonable. An Illuminating
feature Of the railroad situation anpear in the In
terstate Commerce Commission report Of December
!st. 1915 showing that for practically all the rail
rusds in the country the average freight revenue
per ton mile has fallen from So mills in 1921 to
- mills in 1915. decrease Of over Il per cent.
notwithstanding the greatly increased costs and
higher standards entering into the transportation
service Another important statement in that report
showed the return on the Investment In Road and
Equipment for the year ending June 3oth, lsis to
Be slightly in excess Of per cent. That return
Is q great improvement compared with preceding
years but It was earned in year when the country
was enjoying the greatest prosperity IN Its history,
and when many Of the industries which
free TO fix their prices to meet market conditions.
were earning many times six per cent The latter
is a nealnN cOnOltlOn. peneuclhl 10 ne country
at large but it is also in which the railroads.
which must pay the greatly increased prices. wages
and taxes should be allowed to participate through
higher rates upon the commodity they sell viz.
transportation. Under the existing international
complications and exceptional industrial sctivity.
there should be no delay in placing the railroads
in the strongest financial and physical condition.
RETURN ON INVESTMENT IN ROAD AND
EQUIPMENT
While yOur Net Income for the wear after de-
ducthg the sinking and other reserve fund charges.
equivalent to 10 per cent upon the outstanding
CAPITAL Stock tn" return earned on the total in
vestment in Road and Equipment provided for
public only 81 per cent on the Pennsyl-
vana Railroad and lines directly operated. and
Pittsburgh. Your Conranv maintained its dividend
and earned a substantial surplus, but il it had not
heretofore consistently pursued the policy of invest
ing its surplus above reasonable dividends In the
betterment Of your railroads and equipment instead
of providing therefor through the issue o: additional
bonds and stock. the present dividends could not
be maintained under the existing traffic rates
TRAFFIC.
Improved efficiency characterized the operation
during tie year. in bJth freight and passenger
traffic. The number Of tons increased B per cent
and the tonnage mileage increased IS per cent, but
largely by heavier loading the additional tonnage
and mileage required increase OF cnly per cent
in train mileage. II is interesting to point out that
the average train load has been increased IN the
last ten Years from 553 tons to SO tons, D: e per
cent. The average revenue Tcr t"isit tram mile
increased per cent, but heavier expenses No
taxes absorbed the increase and caused . disht
dscresss in nj revenue pr freight tsfn mia Ins