The Washington herald., 1917-11-05
|uBLIC PUTS
1ExPENSE ON R.R.
Holland Says Various Lines
\ Incur Big Expenses
Every Year.

unified various railroads which
stretched from New York City to Buff
falo and expended a great deal, Of
money In improvements. the capital
stock was increased to represent al
feged improvements, to $4,000. 900. That
was regarded at the time as an extra
ordinary capitalization for a railroad
which was confined to the boundaries
OF q single State. There were also
Some accusations that the commodore
had really watered the stock, although
Nbe and others claimed that the stock
Aividend represented the capitaliza-
ton Of the Investments which the i'm
provements represented.
But whatsoever the motive of the
commodore was In increasing the cap
hal stock, nevertheless the total cap
Isalization as 1t stood during the last
years OF the commodore's life was
considerably less than the amount Of
money expended under President AL
fred II. Smith for the purchase, in
three years time. OF locomotives,
freight cars and passenger coaches.
Railroads show Progress.
a What the New York Central repre-
-sented in capital in the '70s Is now
exceeded by the expenditure in three
years of SS4, ~, ,736 for the purchase
of equipment. The figures alone illus
,frate the stupendous strides which
the American railroads have taken
in order to keep pace with the de-
nands of the public for transporta-
zion facilities. The amount expended
within the past three years for rail-
road equipment upon all the railroad
lines of the United States would have
been far greater than the actual ex-
=penditure had the railroad companies
been able to secure fresh capital
whereby they could pay for equip
ment.
I 1t is not stated from what source
v President Smith secured the 900
which he has paid within three years
for locomotives, freight cars and pas
senger coaches. The presumption is
that he utilized some of the credit the
railroad possesses, although he was
Undoubtedly compelled to pay large
interest charges and probably a con-
siderable part of the earnings were
put back into the property through
the purchase of these equipments.
One Of the most instructive OF the
features associated with President
Smiths statement Of his purchase is
one which sets forth clearly in figures
what this equipment would have cost
II it had been purchased at this time.
Presumably the cost would be so
great as to be prohibitive or at least
to entail greatly reduced purchases.
President Smith said recently that
IL this equipment has been bought
at present day prices it would have
cost the New York Central lines $780,
10000 or nearly slO9 100000 more than
the equipment cost when 1t was pur-
chased three years ago. This is an
increase which in the aggregate is
nearly 129 per cent.
Some of the best authorities assert !
that the railway companies OF the |
United States now need fresh cap
itaI in the aggregate of at least |
Isl, 900, ,000,OOO a year and will need |
kearly amount of that size for the |
next five years IL they are to be able
efficiently and adequately to handle
the enormous transportation which
will be offered to them. This estimate
is approximately similar to one made
some years ago by James ]. Hill. who
said that the railroads of the United
States would need some $4,000 90
in a short time il they were to pro-
vide adequate terminal facilities and
sufficient transportation for the vol
''ume of commodities which, unless
handled speedy by the railroads,
would cause congestion and some or
(which might become useless.
President Smith seems to have fore
cast three years ago or just after
the European war began the present
market situation so far as prices for |
railroad equipment were concerned.
For he began in August. 1914, TO buy
very heavily of railroad equipment,
taking advantage of the comparative
-ly low prices that were then pre-
yailing.
He was anxious to make good prep
aration for a situation which he be-
4leved would be created by the Eu-
ropean war and would be greatly in
tenSified in case the United States
were drawn into the war.
The public does not as yet realize
the magnitude as well as the efficiency
~ the service the railroads are now
living. especially in supply the ma
IONS necessities under war stress.
To-day railroad equipment in the
Omitted States cannot be procured at
any price nor can the amount needed
be reckoned in dollars.
AS the United States Is almost as
bUsily occupied in aiding our allies
as it is In preparing for its own par
ticipatiOn in the war, it was deemed
essential by the government at Wash
ington that the needs of the allies for
railroad equipment, which has become
most pressing. especially within the
actual held Of war, should be met
as far as possible by the utilization
OF American railroad equipment in
orstries. Therefore. every kind of
railroad equipment which Is now be-
ing manufactured in the United States
goes to France, Russia or England.
Our railroads are not getting any. (
The government is sending one thou
sand locomotives to France for the
purpose Of aiding the American
armies in France. All of the loco 4
rnotiyes-manufacturing Industries in
the United States are being worked
to full capacity. and will be occupied
In that way certainly until the fall of {
1913 and, If the war be not ended, ;
for still longer time. 1t seems al
most incredible that the government I
should have ordered in a single month I
,fAr use across the sea nearly eleven 5
thousand freight cars. Were we able '
70 furnish the amount asked for by I
Russia, We should be now shipping
frsfsht cars to Russia the aggregate ]
r9mber of which before the ship '
nfsnts ended would be at least forty .
thousand G
What the vital relation of the rail- I
roads to the war is, is summed up
In recent statement which says thatI 9
Poland would have been saved had {
there been better railroads in Rus 1
sla- Belgium might have been saved '
had there been better transportation 6
facilities for the French armies